BlueTie Plays with Hosted App Model

• By The WHIR, October 27, 2006

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BlueTie Plays with Hosted App Model

By Anastasia Tubanos, theWHIR.com

October 27, 2006 -- (WEB HOST INDUSTRY REVIEW) -- Small business email and calendaring service provider BlueTie (bluetie.com) said this week it has begun offering its online email, calendaring and collaboration solution free of charge for small businesses with up to 20 employees.

The company says the unusual move makes it the first provider to offer a state-of-the-art suite of business services at no cost, backed by a brand new business model that generates revenue through partnerships with business service providers.

BlueTie quotes studies claiming the average business user spends almost five hours a day using their email and collaboration applications, using it to store contacts, appointments and email for both their business and personal lives. BlueTie says many email providers, like Hotmail, Yahoo! and Gmail, have attempted to monetize this user behavior by serving banners and behaviorally or contextually targeted advertising within the email application. However, BlueTie feels this usually detracts from the user experience. The company says it believes that the key to successful online advertising are relevance and intent and has designed a new business model to give users an unobtrusive and convenient email experience.

Through a patent-pending email advertising model the company calls "featuretisements," BlueTie has planned a way to deliver value-added services through features embedded into the BlueTie application that enable users to conduct relevant transactions with BlueTie's partners' services.

One such partner is online travel booking agency Orbitz. If a user wants to book a flight for a business trip, he can put the date and location into the BlueTie calendar and the application would pull flight schedules from the Orbitz database, according to the submitted information. The user can book a flight without ever leaving the BlueTie application. Users would pay the same prices offered on partner Web sites, and BlueTie would receive a commission from the partner.

David Koretz, president, CEO and founder of BlueTie says that although the company is offering its application for free, the featuretisements model enables BlueTie to profit just as much as before.

"There are no banner, no contextual and no behavioral ads at all. We get paid by our partners," says Koretz. "For example, every time someone buys flowers from our application, we make $15 per transaction. Every time we book traveling, we make $40 per transaction. So actually, we can make as much money offering [our application] for free as we can with our paid model and we can do it all without charging the user anything, which is kind of the beauty of this model."

BlueTie says that it is working to add new featuretisement services such as sending and receiving faxes, making and receiving VoIP calls, managing email marketing campaigns and integrating yellow pages and other search engines.

Koretz says he developed the featuretisements concept based on his own experiences growing up in the small business world.

"My grandparents own small businesses. My parents own small businesses. So when you spend that much time around small businesses the thing that becomes incredibly obvious is how difficult it is for them to manage technology in their world," says Koretz. "BlueTie's whole goal is to democratize technology, to take technology that only used to be valid to big businesses and used to be really expensive and make it simple and cheap. That was always the passion, that was always the motivation behind it and we get countless calls from customers who say, 'wow this is incredibly inexpensive compared with what I used to do. This has totally changed how I do business.'"

BlueTie plans to syndicate its platform and enable its Web hosting and ISP customers to private label BlueTie and offer it to their clients so that they can monetize and profit from their email applications the way BlueTie does.

"We're very excited. It's probably the biggest launch we've ever done, and I think there are probably a lot of people in the industry that aren't going to be expecting what a big model change this is," says Koretz. "I think it's going to revolutionize two things. It's going to be a dramatic change for the email companies that have typically said 'we're going to do all this at the expense of the user experience,' and it's certainly going to create a lot of intensity for other companies to try and raise that bar and figure out how to give a comparable user experience.

"The featuretisements model is an incredibly powerful way to take an application and allow it to generate revenue without charging the user for service. Traditionally, consumer Web sites and content Web sites just put out banner ads and then they make money on impressions. It's very difficult to do that on an application, so I think there's going to be a lot of light bulbs going off with this launch."

Tags:  appointments  Asia  Partnerships  value-added services  Search engine  Iona  Yahoo! 

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