The Only You e-mail service aims to attract more Internet users and build the Hong Kong-listed firm into one of the strongest Internet companies in China, said Wang Leilei, the company's deputy chief operating officer and head of its Internet business.

"Free e-mail is essential to a portal and it is as important to netizens as water and air," he said.

The company has set itself the goal of becoming the world's biggest Chinese portal by making use of its advantages in wireless services.

Tom.com yesterday started to provide a 10-megabyte free e-mail service to Chinese Internet users, particularly urban youth.

The business also began a promotion yesterday in more than 100 universities in eight cities, including Beijing, Guangzhou and Shanghai.

In September 2000, Tom.com acquired 163.net, then the biggest free e-mail provider in China. The Hong Kong firm was one of the first Chinese Internet companies to stop providing free e-mail services to new users in June 2001.

By the end of last year, the company had about 10 million free e-mail users and 700,000 subscribers to paid services.

Tom.com said yesterday that it would continue to provide paid mail boxes to users who want more memory. Wang said those who have been signed up with the 163.net free e-mail service will be transferred to the Tom.com website, while 163.net will only function as a website for paid e-mail services.

He said all media content on 163.net will be also shifted to Tom.com. The portal business of the Tom.com Group will be based on the Tom.com website.

"This means that our consolidation of 163.net has come to an end," he said.

With the decreasing costs of storage devices and expanding Internet bandwidth, the free service would not lead to a significant increase in the firm's operating costs, he said.

However, with a larger number of users, the company may secure a bigger market share in the expanding online advertising market in China, said Peter Lu, a freelance Internet analyst in Beijing.

According to Yin Yijian, an analyst with Shanghai-based Shenyin & Wanguo Securities, the volume of China's online advertising market was about 550 million yuan (US$66 million) last year, which is expected to rise 32 per cent this year to 720 million yuan (US$87 million).

The market has been dominated by Sina Corp, Sohu.com and Netease.com, which took more than 60 per cent of the pie in the first nine months of last year.

(China Daily April 17, 2003)