updated 9/14/2005 8:37:36 AM ET 2005-09-14T12:37:36

Yahoo Inc. on Wednesday will begin testing a sleeker version of its free e-mail service, shifting to a more dynamic design that mimics the look and feel of a computer desktop application like Microsoft Corp.'s Outlook.

The company plans to invite a "sizable" portion of its current e-mail accountholders to experiment with the retooled service, said Yahoo spokeswoman Karen Mahon, who declined to be more specific.

If the test goes well, all of Yahoo's e-mail users — an audience that spans tens of millions — eventually will be converted to the new system.

Yahoo imported most of the changes from Oddpost, an e-mail startup the company bought for an undisclosed amount last year.

The overhaul, described as the most extensive since Yahoo began offering free e-mail accounts eight years ago, represents the latest salvo in a technological tug-of-war for online traffic.

For the past two years, Yahoo and its main Internet rivals — Google Inc., AOL and Microsoft's MSN.com — have been unveiling a series of upgrades aimed at attracting and retaining their Web audiences so they remain appealing outlets for advertisers.  (MSNBC is a Microsoft - NBC joint venture.)

Google, which runs the Internet's most popular search engine, shook things up in the e-mail market last year by introducing a free service that included 250 times more storage than some of its rivals.  Yahoo and MSN subsequently matched Google, which responded by more than doubling its e-mail storage limit to 2.5 gigabytes.

More recently, the major e-mail providers have been introducing other bells and whistles to keep their users happy and coming back for more ads. Yahoo's upgrade follows recent AOL improvements meant to make its e-mail service quicker and easier to use.

"Last year was the year of storage in e-mail, but now the real competition seems to be about who has the coolest user interfaces," Radicati Group analyst Marcel Nienhuis said.

Yahoo's e-mail service is currently leading the pack, with 63.6 million unique U.S. visitors during July, according to the most recent figures from comScore Media Metrix, a research firm.  AOL ranked second with 48.7 million visitors followed by MSN's Hotmail (44.4 million), Comcast Corp.'s Webmail (5.6 million) and Google's Gmail (5.4 million).

With its changes, Yahoo's e-mail will look more like a traditional inbox that operates through a software program installed on a computer hard drive instead of being hosted on the Internet. Yet Yahoo's redesigned service still relies on a Web browser and won't require its users to install anything on their computers.

Using "dynamic" html, Yahoo's e-mail accounts will feature an inbox containing all e-mails on the top of the page with a separate pane for reading e-mail below it.  The feature is meant to enable users to scroll through an e-mail folder without having to click back and forth between Web pages.

Yahoo's test audience also will use a computer mouse to "drag and drop" e-mails from one folder to another and search all the content, including attachments, stored in the inbox.

"Our competition has been doing some interesting things in e-mail, but we think we have leapfrogged them all with all these new features," said Ethan Diamond, an Oddpost co-founder who works for Yahoo as a director of product management.

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

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