Try not to gasp or anything. Time Warner's (NYSE: TWX ) America Online is on the verge of offering free email. It seems to me that it's hard to get excited about this news, especially given the already-crowded free-mail business.
Yahoo! (Nasdaq: YHOO ) Mail and Microsoft's (Nasdaq: MSFT ) Hotmail have been around for years. They got shook up last year when Google (Nasdaq: GOOG ) entered the action with Gmail, which introduced gigs of storage to the free-mail landscape.
The AOL version of free e-mail will offer 2 GB of storage space, which matches Google's recent anniversary upgrade. However, it seems pretty silly to think that being a latecomer to this particular space will work.
AOL's Internet rivals are deeply entrenched, and Internet users tend to be a pretty sedentary bunch when it comes to email accounts. (AOL should know this; longtime customers' desire to keep the e-mail addresses they've had since the Internet's teething days may be one factor stemming their defection from AOL's online service.)
Therefore, the amount of expected churn among the free-mail providers seems questionable. When Google entered the ring, it not only offered an unheard-of amount of free storage, but it also provided some innovative features. Of course, it had a lot of Google-flavored buzz to recommend it as well. (Its rather viral marketing scheme, involving an invitation-only beta launch, was probably the final element that lured people to become Gmailers.)
At this time, I'm pretty sure many of us already have more free mail services than we need; I know I currently run accounts from Yahoo! and Gmail.
There is one area that sets AOL's free mail offering apart from the rest -- it will tie in heavily to the company's very popular AIM instant messaging service. That might make some difference; even people who are not paying members of the AOL community tend to have AIM accounts.
Several of us here at the Fool have been wondering if Internet veteran AOL can recapture its old glory -- here's a piece by longtime Fool Rick Munarriz that sums up some of the company's recent initiatives. So far, AOL's efforts seem a bit touch-and-go as it brainstorms new ways to lure users and subsequently bulk up advertising revenues.
Unfortunately, making up for lost time seems to be a recurring theme for AOL. The AIM angle does improve the situation, but for now, it seems that the compelling, unique value-add that would be necessary for any meaningful defection from one free mail service to another is missing.
AOL's been going like gangbusters lately to woo customers and loyalty. Here are some examples:
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Alyce Lomax does not own shares of any of the companies mentioned.
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