America Online is launching yet another free product - an ad-supported email service tied to its AOL Instant Messenger (AIM), according to an AP story. Users will be able to send and receive mail with "aim.com" addresses using their AIM screen names. Users need the latest version of AIM software, available as a beta download today, but eventually they'll be able to use the service from any Web browser. A key difference between the subscription-based AOL mail and free AIM mail will be in ad placement. Ads appears on the bottom for paid AOL accounts, but on top in the free AIM service.

Reuters writes that the free service, which will offer two gigabytes of storage, comes ahead of a relaunch of the free AOL.com Web site later this year. And AOL will integrate its recently launched digital phone service this fall, when the AIM software will be rewritten to allow users to retrieve voice mail, email and instant messages from any computer.

The new mail service is part of AOL's effort to revamp its business model away from one that depends on subscription revenue. AOL has been losing subscribers to phone and cable companies offering high-speed internet access, but its advertising revenue jumped 45 percent year over year in the most recent quarter.