The Gmail news today about their new email features got me thinking about the Future of Email. Where is the real innovation in email?

From the beginning of "web time" experts like Ester Dyson (and others) have always said that the the killer app of the Web is email.

In 2007 Esther took a look back at Web 1.0 and writes about what made email the killer app …

Of course, business and social contexts change, often as a consequence of new technologies. In fact, Dyson believes that a technology’s significance can be judged by how much it changes our behavior. E-mail is the obvious example: The technology lacked significance until it reached a critical mass of usage.

A change in how people communicate made e-mail the ultimate killer app. Dyson also notes that that critical mass didn’t come together all by itself. E-mail would never have spread as quickly had the operators of independent networks such as MCI and CompuServe not committed to the Internet standard of the late 1980s.

What’s Next For Email As Business and Social Contexts Change?
Consumer email hasn’t evolved in nearly a decade, while the explosion of Facebook, Twitter and other communications platforms serve as real evidence that people are really ready for smarter, more engaging ways to communicate. In fact, numbers show that we’re spending more time on social networks than we are in our inboxes.

But, at the end of the day, email is still there and we still rely on it despite all of its limits. For example, after you read this post, you’ll most likely go right back to email to stay connected to the people and the projects that need your attention.

You know as well as I do that consumer email has no choice but to evolve and in some ways, it IS changing. But that innovation isn’t credited to any of the email leaders, the institution of email is receiving its overdue transformation from the startup industry. In the last year Cc:Betty, Xoopit, Xobni, and Gist are all examples of companies who are thinking “outside the inbox” to create and market solutions that enable Inbox 2.0 or the much discussed Social Inbox.

– Xobni and Gist duke it out head to head for the MS Outlook smart plug- in

– Xoopit is indexing your files, but only for Gmail today

– Cc:Betty is making email more social, engaging, smarter, all via a clever "email assistant"

The real power lays in the hands of the major players in the email market. Online email (Gmail, Yahoo! Mail, Hotmail, AOL Mail) and desktop clients (MS Outlook, Lotus Notes) all have the ability to revolutionize email as we know it, raising the bar and setting the table for the future of the social and more productive inbox.

The ball is in their court and the easiest way to move down the path of innovation is via acquisition, not only for technology, but for DNA. Innovative and outside companies bring much more to the table than a “great idea.” It is the DNA that can identify what is lacking, seek out a better way and then build it.

It’s time for the big boys to break out the checkbook to make email matter again. Innovation needs to take the next step. And not only that, but to make email work in ways that mirror the form of function of how we’re already communicating on other platforms such as Twitter, FriendFeed, Facebook, and other social networks.

So who should buy which company and why?
Microsoft should buy either Xobni or Gist and make one of them native to Outlook – without making them just a feature within the email client. Recent research by the Radicati Group estimates by the end of the year 241 million people will have MS Outlook installed. Just think, having a cutting edge tool in front of nearly 250 million people daily is a great way to help push an innovative product to the masses via consumer platforms.

Taking something useful and innovative to the consumer market is really in the hands of companies such as Microsoft, Yahoo, AOL or Google. One of these big guys would not only do well by acquiring Cc:Betty and integrating it into their web mail services, but also improve the efficiencies for how people talk, share, and collaborate.

Going beyond just integrating it within one web mail service, the Cc:Betty mail space approach being native to all these would make email better and offer another way to monetize and extend the brand.

So why are these guys asleep at the wheel?
The innovation is there. Users are there. Demand is there. If they’re not going to invent from within, then cut a check and integrate ingenuity to deliver a better, modern, and realworld experience today. The inbox isn’t going away anytime soon, but it is losing its ability to keep people connected and its inhibiting the way people are learning to work together.

Microsoft, Yahoo, AOL, Google, email is the biggest social network in the world. Can they do something about it! Like Esther Dyson’s mentioned above about Web 1.0, the big players enabled the killer app to be realized. Now it is time for the big guys to do the same except it’s not MCI and CompuServ but Microsoft, Yahoo, AOL, and Google.