AOL Readies Web E-Mail Contender

The company begins testing a remodeled Web-based e-mail service that will serve as the basis for an offering to take on Yahoo, MSN Hotmail and Gmail.

America Online Inc. is preparing to compete next year with Yahoo Inc., MSN and Google Inc. in the free Web-based e-mail market.

The Dulles, Va., company late Tuesday launched a beta of a revamped Web-based e-mail service called "AOL Mail on the Web." It is available to AOL members who are registered beta testers.

In early 2005, the service will replace an existing Web interface that lets AOLs paying subscribers access their e-mail from the site, said AOL spokeswoman Jaymelina Esmele.

But later in the year, the company also plans to open the service to nonsubscribers—a move that would pit it against the likes of Yahoo Mail, MSN Hotmail and Googles Gmail beta service.

"While its only available now to members, it is paving the way to a free Webmail service we will eventually be launching in 2005," Esmele said. "It is part of [our] broader strategy to offer more AOL services on the Web to audiences beyond members."

AOL has struggled this year as its base of dial-up subscribers has continued to fall, and the company has begun embracing a model where it would offer to the broader public its online services that once were available only to subscribers. It already has begun testing a standalone AOL Web browser and desktop-search tool.

The beta of AOLs Web-based e-mail service provides a redesigned interface for checking e-mail on the Web with features more common on desktop clients. One feature in that vein is rich-text editing, which allows users to alter the color and fonts of e-mail text, Esmele said.

The betas user interface is based on technology from Mailblocks Inc., an anti-spam company that AOL acquired in August.

"We have a new look and design, and weve made performance enhancements to make it faster for pages to load," Esmele said.

AOL also has tied the beta into presence information from its AOL Instant Messenger service, she said. When AIM users are logged in, a miniature version of AOLs "Running Man" icon appears within their e-mail messages that allows a recipient to launch into an instant-messaging session.

In another tweak, new messages appear automatically in the beta, rather than requiring users to refresh their in-boxes.

AOL has targeted Web-based e-mail because e-mail is the most popular application among its members visiting the Web site. About 90 percent of the 18 million members who visit the site every month do so to check e-mail, Esmele said.

AOL will be joining a reinvigorated Web-based e-mail market. Googles entry in April with a beta service that provides 1 Gigabyte of storage for free led competitors to rush to increase their storage limits and to refresh their features and services.

Both Yahoo and MSN Hotmail upped their storage limits to 250 megabytes for free accounts and 2 gigabytes for paid accounts. Yahoo also acquired e-mail startups Oddpost Inc. and Stata Laboratories Inc. earlier this year.

/zimages/4/28571.gifClick here to read more about Hotmails staggered storage boost.

AOL has yet to announce whether its new service will compete directly on e-mail storage. Current AOL subscribers receive 100 megabytes of storage for each user name on an account, and that has not changed in the beta of the AOL on the Web service, Esmele said.

But AOLs ICQ subsidiary in November entered the storage race when it launched a premium version of ICQmail with 2 gigabytes of storage. The service costs $19.99 a year.

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