It seems that Facebook is preparing for a major update to its service. They are preparing to launch an email service that claims to be the long-awaited Gmail killer. Rumors of starting their own email service have been circling the web for some time, but now they seem to be close to delivering just as big a blow to the Gmail, Hotmail and Yahoo services.

And it won’t just be an email service, it’s expected to be more like an update to Facebook’s existing instant messaging service, which has great potential. All of the social media expertise the company has could clearly help provide better service, like prioritization based on your contacts and other powerful features. They already have the most popular photo product, the most popular event products, and will soon have a very popular local sales product as well. They could also modify their email client to display the content of each of them smoothly.

The Facebook representative sent out invitations to various media outlets for an event Monday in San Francisco, believed to be the announcement of the web-based email service. However, it’s not official and all we know is that Mark Zuckerberg will be presenting at the Web 2.0 Summit. According to some online sources, FoxNews will cover the event live.

With more than 500 million members worldwide, Facebook could become the world’s most powerful free email and website provider and challenge the most popular email clients such as Hotmail, Yahoo and Gmail. Imagine the web hosting needs of such a service, hopefully the newly built data centers will cover this. Currently Hotmail is the true leader with more than 360 million users, followed by Yahoo with 270 million and Gmail with 190 million.

While not all Facebook users will be using the new email service, chances are a large percentage of the user base will. With its potential instant size and benefits for making email more useful, it’s sure to make other email giants very nervous. Actually, the Google vs. The Facebook war continues as Google blocked Facebook from importing contact information from Gmail last week after Facebook refused to share data about its users.

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