America Online Inc. plans to launch on Thursday an upgrade of its AOL Mail on the Web product for subscribers, a precursor to a free e-mail service the company plans to introduce later in the year.

AOL web mail, available to subscribers through its AOL.com portal, has been upgraded with features based on technology from Mailblocks Inc., a web-based consumer e-mail service that AOL acquired in July, AOL officials said Wednesday.

The online service has been given a new look and design, taking the interface away from its roots in the AOL 9.0 client.

"We've totally changed the interface to make it easier to use and much faster," Roy Ben-Yoseph, AOL director of e-mail products, said. "We've optimized it for the Web."

AOL's focus on the web is an indication where the company is heading with the mail service.

"It's the same technology that will be used to build our free web-mail service later in the year," Ben-Yoseph said.

AOL has been improving services on its AOL.com portal, as it prepares to compete for online advertising dollars against rivals Yahoo Inc., Microsoft Corp. and Google Inc. AOL has beefed up its portal as revenues from its traditional dial-up service has declined. Many AOL subscribers have been lured away by broadband service providers.

Among the latest improvements on the AOL portal was a new local-search site that aggregates all of the Internet portal's local services on one site. AOL Local Search launched last month included the Yellow Pages, CityGuide, Moviefone and MapQuest services, as well as tools that narrowed searches by zip code, street address or city. The announcement followed by about a month AOL's release of a beefed up version of its search engine.

Among the improvements to AOL web mail is greater integration with the company's instant-messaging service. The web mail client will show whether an email sender is logged on to the AIM service.

The same AIM indicator will also be integrated with the AOL Address Book in web mail.

For writing messages, web mail will include rich-text formatting features that provide more options for the style of email compositions, including the ability to change fonts, font sizes and colors; add bullets or numbers, and change text alignment. There's also a built-in spell checker.

Mail storage for AOL web mail is limited to 100MB per screen name. Free web mail services by Microsoft's MSN and Goggle offer 250MB and 1GB, respectively.