AOL is to take on Yahoo and Microsoft in the free e-mail market. At the same time, Google is gearing up the long awaited G-Mail service.

The giant services provider has seen stiff competition to its paid for web services. A follow-on has been a tough advertising market.

Moves towards a comprehensive free e-mail service include an update to the AOL Instant Messaging service. AIM will now integrate more closely with third party clients such as Outlook.

The US is to get a new search facility. A number of search streams will be consolidated into a single search engine. Included in the move are, Moviefone, MapQuest, CityGuide and AOL Yellow Pages.

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