AOL announces email over-haul, Facebook announcement expected

A sign on the AOL corporate headquarters in New York City.

TEXT OF INTERVIEW

JEREMY HOBSON: Lots of internet email news to tell you about this morning. AOL has announced Project Phoenix, the long-awaited overhaul of its email. And later this morning, Facebook is expected to announce an email service of its own which some are calling the Gmail Killer.

Marketplace's Stacey Vanek Smith is here with me now live to sort through all these domain names. Good morning, Stacey.

STACEY VANEK SMITH: Good morning Jeremy.

HOBSON: So AOL announced yesterday a new email service. Why did they roll this out last night?

VANEK SMITH: Basically as you said, it was all about Facebook. Facebook is expected to announce its own email service a bit later this morning. And that's actually the real news here because these days the business of email is not actually about email. I spoke with Net-tech's Steve Kennedy about this, and here was his take:

STEVE KENNEDY: Doing email has nothing to do with actually providing an email service, it's providing an advertising platform.

Email services can now mine your emails and show you ads that are based on what you're talking about. Facebook already has tons of information on us -- so all of that together could be an advertising gold mine.

HOBSON: Now why is Facebook's email service already being called the gmail killer?

VANEK SMITH: Because Facebook has half a billion users. If all of those users started using Facebook email, that would make it the biggest email provider in the world by far, more that double the size of Gmail. But Duke University's Ken Wilbur thinks this might be a dangerous move for Facebook.

KEN WILBUR: You talk to college students for them, email is for people over 30. It's like, 'Don't trust anyone with an email account.'

Wilbur points out that having an older-people image is part of the problem AOL has now.

HOBSON: I think a lot of us feel a lot older right now. Marketplace's Stacey Vanek Smith, thanks.

VANEK SMITH: Thanks Jeremy.

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