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Google will use its feted scalability skills to take on Yahoo! in the email business, according to the New York Times.

The plan is to take on the tiered pay-for email services and offer more space for free. Much more, if early reports are true: up to 1GB. NY Times hack John Markoff cites an internal Google study which the operational cost of maintaining email is estimated to be "less than $2 per gigabyte". Google will pay for this by injecting advertisements into subscribers emails.

Yahoo! offers 25MB for $29.99 a year, 50MB for $39.99 a year and 100MB for $59.99 although these packages also include features such as POP forwarding and multiple addresses for foiling spammers. According to the San Jose Mercury, which saw a preview of the service, Google will offer users 1GB of email storage.

Capitalizing on the pre-IPO frenzy that accompanies every new Google feature, the company issued a spoof press release today - of all days! - in which co-founder Sergey Brin says, "And while developing Gmail was a bit more complicated than we anticipated, we're pleased to be able to offer it to the user who asked for it."

The service is real, however. The advertisement injection has sparked fierce internal debates, reports The NY Times. "Many people inside the company are worried that users might fear that the content of their e-mail messages could be used to tailor individual advertising messages, much as ad messages are now placed on pages tied to specific responses to search inquiries."

Google's Orkut terms and conditions - Google revives discredited Microsoft privacy policy for Friendster clone - don't inspire confidence: they closely resemble a Passport privacy statement that Microsoft was forced to abandon.

Google acknowledged privacy concerns about the service by insisting that "machines, not humans" would decide on the advertising inserts.

Such a defense has worked for Google's News service. A banner on the page states that "The selection and placement of stories on this page were determined automatically by a computer program." (A program written by … you can guess. A big red foam ball.)

And it worked for Bill Gates too. At an awkward point in his testimony to during the Antitrust trial, Chairman Bill was asked to confirm that he'd written an incriminating email that had come from the account billg@microsoft.com.

"The computer wrote it," said Bill. So the next time you knock over a pedestrian, blame the machine. It works like a charm. ®

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Google revives discredited Microsoft privacy policy for Friendster clone

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