The rumor was true! Google announced today that they will launch a free, web-based email service. This is a big diversification for Google, but with Yahoo and MSN moving onto their search turf, Google could likely not afford to sit still.

The service, called “Gmail,” will come with a whopping 1GB of storage for a very affordable – FREE.

Yes 1 Gigabyte!! That’s 100x more than some of its competitors! That’s 500,000 pages of email! That’s not an April fools joke! Of course the service will pack a powerful search engine that will enable users to search every email they have ever sent or recieved.

Google co-founder Larry Page said, “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!”

I am sure users will love it too. Google knows that “good” is simply the cost of entry these days. So they decide to turn free web-based email on its head by launching not just another service – but one that looks like it will be many heads above the rest.

What’s in it for Google? Well, the service should increase the companies revenues by displaying text advertisements matched to the content of your email. This will be good for advertisers but could have privacy groups crying afoul.

According to Google, key features of Gmail include:

Search – Built on Google search technology, Gmail enables people to quickly search every email they’ve ever sent or received. Using keywords or advanced search features, Gmail users can find what they need, when they need it.

Storage – Google believes people should be able to hold onto their mail forever. That’s why Gmail comes with 1,000 megabytes (1 gigabyte) of free storage ? more than 100 times what most other free webmail services offer.

Speed – Gmail makes using email faster and more efficient by eliminating the need to file messages into folders, and by automatically organizing individual emails into meaningful “conversations” that show messages in the context of all the replies sent in response to them. And it turns annoying spam e-mail messages into the equivalent of canned meat.