updated 6/6/2005 2:37:56 PM ET 2005-06-06T18:37:56

America Online Inc. launched a free, Web-based e-mail service on Monday, departing for the first time from a fee-based subscription model as it moves to compete with free, and increasingly large, e-mail accounts offered by the likes of Google Inc. and Yahoo Inc.

The unit of media conglomerate Time Warner Inc. said the service will provide users with two gigabytes of storage, along with protection against viruses and spam. The mail program is being marketed as an extension of the company's popular chat application, AOL Instant Messenger, and users of that program will be able to use their existing screen name for their e-mail address, the company said.

Google's Gmail service currently gives users about 2.3 gigabytes of storage and is gradually raising that ceiling. Yahoo offers 1 gigabyte for free and Microsoft Corp.'s Hotmail allows 250 megabytes.

(MSNBC is a Microsoft - NBC joint venture.)

The company also upped its offerings for paying subscribers to its traditional America Online e-mail, giving its nearly 80 million accounts unlimited storage space. AOL said it is the first online service to offer unlimited e-mail storage.

The company also said it will allow multiple simultaneous log-ins for dial-up connections, an offering previously reserved for high-speed connections. The change allows members with different screen names, but on the same account, to log in at the same time from multiple locations.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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