Is it not in the interest of a service's users for that service to operate at a healthy clip of profitability? Email alerts like this can make a very big difference in clickthrough rates, implying both that users find them useful and that the company would take a significant viewership loss if they stopped the practice.
Look at what Google did that other portals weren't doing.
Yahoo, AltaVista, Excite, Jeeves, etc., kept trying to get stickier and sticker, and reduce bounce rate.
Google sought to get increasingly relevant, and increase bounce rate. A user hitting the site and not clicking through to another page was viewed as a success, not a failure. Sure, it's a lost ad impression, but it's a satisfied user.
By putting the user experience first, Google completely trounced a "sewn-up" market.
Google won by trouncing the others in search, but Google has expanded into all the same kinds of services that Yahoo, AltaVista, et al were attempting to provide; there is Google Mail, Google News, Google Finance, etc., for the same reasons that Yahoo and others provided this -- because they live and die by page views.
Google simply attacked the problem from a more intelligent angle; first, they greatly focused on providing hugely, undoubtedly better search results, which, despite the "niceties" of Yahoo et al, was a game-changing deal. Secondly, they outsourced their ad network much more effectively than everyone else, so that most of the time when you followed a link outside of Google, you'd end up on a page that showed ads from Google anyway, so Google still made money. Thirdly, they started wrapping up as many services as possible under their umbrella, both to increase page views and to increase the intelligence and targeting of their ad delivery.
So Google really did end up following the same approach, they just did it in a cleaner, more subtle fashion, and I don't even think that's the main thing that allowed them to excel; the primary reason they killed Yahoo and friends is because their search results were ridiculously superior, so there was no way Yahoo could compete despite its "personalizations". If Yahoo was smart, they would have licensed the tech from Google early on and Google could've been an IP vendor to the extant search engines, licensing out its algorithm. Yahoo's dominance would have remained that way, because once a certain critical mass is reached, the inertia is difficult to overcome unless you have a very serious improvement over your competitor's product.
The secondary reason Google killed Yahoo is that they aggressively expanded AdSense so that when you followed a link off Google's site, they were still making money, and the tertiary reason is that they bundled as many services as they could under the Google umbrella, increasing data to mine for ad targeting and increasing ad views, expanding even to your cell phone (that is, they did the "portal" thing).
Yahoo et al neglected points 1 and 2 because they thought they had it locked up. Google came out of left field with a far superior search system, and that was really the killer app.
