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In what may -- or may not -- be its most ambitious foray beyond its core search business to date, Google (Nasdaq: GOOG) has announced it will launch a free e-mail service called Gmail.
The tone and timing of the press release, dated April 1st, led some to speculate that it could be an elaborate April Fool's Day hoax. But the release pointed to an extensive FAQ (frequently asked questions) page about the service, whose launch was first reported Wednesday, and such a prank might be risky for a company said to be biding its time before an initial public offering.
If it proves to be a legitimate offering, Gmail would have one major difference from MSN's Hotmail and Yahoo! Mail: a full gigabyte of storage space. Google said the 8 billion bits of space allotted to each user will be enough to store approximately 500,000 pages of e-mail 
messages.
The other two major free e-mail services offer relatively small e-mail inboxes -- just a few megabytes -- that require users to either continuously purge older messages or purchase subscription upgrades that give them access to more storage space.
Planting a Stake
By claiming it will offer nearly unlimited storage for average users, Google seems to be positioning the e-mail service as an extension of its core search business, billing Gmail as a place where incoming and outgoing mail can be stored permanently as well as searched and indexed.
The tightly controlled launch of Gmail reportedly began with some 1,000 invited users gaining access to the service. If the test goes well, a wider rollout will follow, possibly in a matter of weeks, Google said.
Gmail would put Google directly in competition with Microsoft (Nasdaq: MSFT), whose Hotmail service remains the world's most widely used Web-based e-mail offering, with some 170 million users.
Nothing New?
In the press release, Google co-founder Larry Page said the seeds for Gmail were planted by complaints from a Google user about existing Web e-mail programs. "She kvetched about spending all her time filing messages or trying to find them," Page said. "And when she's not doing that, she has to delete email like crazy to stay under the obligatory four megabyte limit. So she asked, 'Can't you people fix this?'"
He said Gmail will help make e-mail more useful by enabling automatic grouping of messages and subsequent replies into "conversations."
He also added, enthusiastically: "Gmail solves all of my communication needs. It's fast and easy and has all the storage I need. And I can use it from anywhere. I love it!" Hmmm.
Advancing Toward IPO
Google's diversification is unmistakable and seems to be gaining speed of late. Google is said to be biding its time before choosing a window through which to launch what will easily be one of the most hotly anticipated technology IPOs in recent memory.
"They've been very careful not to go off onto some tangent that has nothing to do with search," Yankee Group analyst Rob Lancaster told the E-Commerce Times. "That's what brought them to this point. But at the same time, they clearly have opportunities to capture some more of the time of the millions of people who are coming to their site to start searches."
Expanded Menu
Earlier this week, Google rolled out features that it billed as "personal search," including e-mail delivery of search results and tailored search results that use stored preferences. The company also bumped up the profile of its comparison-shopping search site, known as Froogle, as part of an overall redesign of its legendarily spare home page. The previous week, the company launched a local search feature designed to expand the base of advertisers it can attract.
"There's little question that Google is shifting into high gear," Forrester Research analyst Charlene Li told the E-Commerce Times. "They keep layering on more features and services that really show how far search can reach."
Google probably has dozens of other pet projects and experiments under way, Li added. The company expects all employees to pursue personal projects that they are given company time -- 20 percent of their work week -- to nurture. So far, the strategy appears to be paying handsome dividends.
For instance, a test version of a social networking site launched recently began as a Google engineer's side endeavor and bears his first name -- Orkut. Google claims Gmail also was developed as a side project.
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