msnbc.com staff and news service reports
updated 3/31/2004 11:15:04 PM ET 2004-04-01T04:15:04

Search giant Google Inc. announced Wednesday that it would launch a free ad-supported Web-based e-mail service that would let each user store up to 1 gigabyte of data and include a built-in search function.

The announcement of the new "Gmail" service was first reported by the New York Times and quickly reported by CNET News.com and wire outlets as well. The timing and wording of Google's press release, however, immediately generated speculation on online forums that the news was an elaborate April Fool's prank by Google.

Google spokesman David Krane, reached Wednesday night, admitted that the "color and personality" of the press release -- which is dated "April 1 UTC" and includes phrases such as "millions of M&Ms later, Gmail was born" -- "was indeed in the spirit of April 1" but said that Gmail was a serious product.

"We are beginning to test a free e-mail service," Krane told MSNBC.com.

For now, Google is only opening up the service to invited users but expects to make it accessible to everyone within a few weeks, Google co-founder Larry Page told The Associated Press.

A built-in search function will let people type in keywords to sort e-mails or find old missives. To finance the service, Google will display advertising links tied to the topics discussed within the e-mails. For instance, an e-mail inquiring about an upcoming concert might include an ad from a ticket agency.

At 1 gigabyte per user, Google will be offering more than 100 times the storage that some of its rivals do, enough to hold 500,000 pages of e-mail, the company said. Yahoo, the leader in free Web-based e-mail, offers 4MB of free e-mail storage. Microsoft's Hotmail, the No. 2 service, offers 2MB. (MSNBC is a Microsoft - NBC joint venture.)

Google will limit individual attachments to 10MB, Krane told MSNBC.com, and there will be terms of service to which users will be expected to adhere. Gmail accounts are currently set to expire after nine months of inactivity, Krane said. Hotmail deletes user e-mail after 30 days of inactivity; Yahoo declares accounts "dormant" after four months of inactivity.

Google has been ramping up a number of ancillary services in recent months, even as Yahoo and Microsoft have been making aggressive moves of their own toward taking on Google's dominance in search. Earlier this week, Google added a link to its Froogle shopping tool to its home page and said it was testing new services to deliver personalized search results and alerts.

Google is widely expected to sell shares in an initial public offering later this year, and some in Silicon Valley had predicted the company would roll out an e-mail service to match offerings from Yahoo and Microsoft.

“E-mail is the killer (application) for getting people to share information,” Gary Stein, senior analyst at Jupiter Research, told Reuters. Such information is seen by search providers as key to delivering more personalized results.

“It’s the march of Google toward being a destination,” Stein said, echoing a widely held view that the company is moving closer to being an Internet portal like Yahoo and Microsoft's MSN, with a full range of products and services from e-mail to online shopping.

MSNBC.com's Lori Smith, the Associated Press and Reuters contributed to this report.

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