gmail, a powerfull target marketing tool

When I got my account on gmail many years ago, I was wondering why google was spending so much resource/wasting to provide free email service as hotmail, yahoo and so many others. Were they making enough money on gmail advertisement? Does that worth the investment?
I though at one point that their primary end goal was to launch a corporate email portal so company won't need to hire high paid sys admin to provide mail server support and by the same time help world wide employee getting something way better then outlook/exchange server that pollute our live. They are doing it already but I think their real goal was to do target marketing but not traditional one.
What better can you get then user emails to understand his profile and do target marketing. They get the highest quality info from your emails, yes your emails.
According to my experience in more traditional target marketing for Bell and at Microcell-Lab, when people do traditional target marketing, they have few info about users and derive new information from which they try to generate better predictions. As an example, they use your postal code to estimate your family revenue etc, and use that information to generate better prediction that you will buy X or Y.
Traditional target marketing practitioners use a lift approach to get the top N most probable buyers for a given product or service and will try to approach those people with promotion or email etc. With gmail, it it way more simple, you use user profile info like email words (btw, they are parsing your emails, take a close look, you will see), and use a prediction engine to advertise the info you are most likely going to like or buy and show it to you directly because you are using their mail service.
Gmail is an amazing target marketing tool because it get profile info directly at the user fingerprint, can do way better prediction then traditional target marketing technics and has access to the customer directly and scale well to get more users. Our prediction is always as good as your data. What's the point of improving algorithm if you can get better and high quality data or as google do both. Larry Page and Sergey Brin are just visionary target marketers!