Jonathan Rosenberg, vice president of Google's products group, said yesterday that the ads would be akin to coupons that shoppers get at grocery stores based on what they've just purchased. "We serve ads that are useful to people," he said.
For example, during a trial run of the service, Rosenberg said he and his sister exchanged e-mails that discussed their mother's interest in gardening. An ad for a garden bench then appeared next to the text of his e-mail. He bought the bench for his parents' 50th anniversary.
"If someone sends you an e-mail offering condolences about a lost loved one, is an ad going to come up for grief counseling? Or a funeral home?" said Rich Wiggins, author of a book on Web publishing and a technologist at Michigan State University. "Some of those ads could be really creepy."
Kevin Bankston, an attorney working as a fellow at the Electronic Frontier Foundation, a consumer group, worried that the information kept by Google for advertising purposes could wind up in a gray legal area not protected by the Electronic Communications Privacy Act.
Larry Page, a founder of the search engine company, called that criticism "crazy."
"I think that our intent in this is to treat any information that is generated by your e-mail as your e-mail itself," he said in an interview. "If there's a possibility of this, that's something we should definitely investigate."
While Microsoft's Hotmail and Yahoo's Web-based mail service offer 2 or 4 megabytes of storage space, Google's "Gmail" service will offer a gigabyte (1,000 megabytes). That's equivalent to 500,000 pages of e-mails, according to the company -- enough that users might never have to conserve space in their accounts by deleting e-mail. Also, using the search engine technology that made the company famous, Google Gmail account holders will be able to search through the content of their archived e-mails.
But some analysts worried about the security implications of users being able to keep so much of their life and correspondence in one place.
"I think this whole thing could be an electronic noose," said Roger Kay, analyst at IDC. "The more defined you are, the more definable you are, the more you're exposed" to possible security problems, he said.
All year, Google has provided fodder for Silicon Valley hype and rumor about a possible upcoming initial public offering, though the company has declined to comment on the speculation. The company has been piling on new features and revamped the look of its search page earlier this week.
According to research firm comScore Media Metrix, the Google search engine is one of the top five Internet properties, with 60 million unique visitors in February, or 40 percent of all U.S. Internet users. That traffic is up 24 percent over February 2003.
E-mail addresses of users with the Google service will end in "gmail.com." About 1,000 users started a "beta" test of the service on Wednesday; Google did not announce when the service will be available to the public.
While free Web-mail services, such as those offered by Microsoft and Yahoo, have sometimes been barely distinguishable from one another, the debut of Google's service could have a dramatic impact on its rivals, some analysts said.
A statement from Microsoft's Hotmail service released yesterday played down Google's announcement as "interesting" and a "very limited beta." Hotmail has 170 million active users, according to Microsoft.
Nate Elliott, an Internet advertising analyst at Jupiter Research, said that the step was just the latest in the "portal-fication" of Google.
"Yahoo lost its lead in search by becoming a portal," he said. "So much of [Google's] reputation is built on [having] a clean, white site with no distractions."
But, Elliott said, "I'm still not convinced it's not a joke."
The April 1 timing of the announcement led several online publications to speculate yesterday that the new service was a hoax.
"Elvis: First Known Gmail User" was the headline on one site, WebProNews.com, where writer Garrett French observed that yesterday's announcement reads "like an Onion reporter wrote it in a parody [of] Google's loose, freewheeling corporate image."
Google did offer one April Fool's joke at its Web site yesterday, an announcement that it will open an office on the moon. Rosenberg at Google confirmed that the search engine is not interviewing candidates for such a facility at this time.