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Facebook E-Mail As Gmail Killer? Unlikely

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It’s now apparently an open secret that Facebook will launch some sort of e-mail service at an event Monday. TechCrunch, which had reported for months that Facebook was working on a “full featured webmail product,” says it’s being called a “Gmail killer.” But will it have any legs? There’s good reason to doubt that any company can easily break into this market.

What we know: TechCrunch and InsideFacebook both say Facebook users will be able to create — or maybe — e-mail accounts. ZDNet reports that the product will also directly integrate a web-based version of Microsoft (NSDQ: MSFT) Office.

But as we’ve detailed before, despite its size and the amount of information it has about its users, Facebook’s entrance into a category by no means guarantees success. Twitter, Craigslist, and, most recently, Foursquare are all doing fine, despite new competition in their respective markets from Facebook. And, those are all categories that, arguably, are not as entrenched as e-mail.

People don’t like to switch their e-mail accounts. Period. Compete ran a chart earlier this week showing that Gmail still lags badly behind Yahoo (NSDQ: YHOO) and Hotmail when it comes to traffic — after six years of being the buzziest product in the U.S. e-mail market; comScore (NSDQ: SCOR) figures also show Gmail behind Yahoo and tied with Hotmail when it comes to unique visits–but far behind both when it comes to total monthly visits, suggesting that many people who sign up for Gmail don’t rely on it as their primary e-mail accounts.

More interesting, perhaps, was a second Compete chart showing that overall traffic to e-mail sites has dropped over the last year and is up only slightly compared to two years ago. One reason for that slow-down, at least according to Yahoo CEO Carol Bartz, is that consumers are increasingly sending some short messages to each other via social networks, instead of through e-mail accounts. That, of course, is a market that Facebook already dominates.

Perhaps it’s actually that lead that Facebook wants to protect; after all, all of the major e-mail players, including Yahoo and Hotmail, are adding more and more social features to their own products. Yahoo, for instance, now allows its Mail users to easily update their Facebook status from within their inboxes.

MySpace (NSDQ: NWS) has also tried a similar strategy, rolling out its own e-mail service last summer, which it said at the time had the potential be the second-largest player in the U.S. ComScore figures show, however, that its share of the market has in fact fallen since its debut. (We’ve asked MySpace for comment but did not hear back).

One other competitive possibility: While Facebook e-mail might not be a “Gmail killer,” it will at least mean that Facebook has a competitive offering. That might be useful as it battles with Google (NSDQ: GOOG) over access to each other’s contacts. Earlier this month, Google stopped letting its users automatically import their Gmail contacts to Facebook, saying that Facebook was not letting its own users easily export their own contacts on the social network to other sites.

What better way for Facebook to respond than to invite frustrated users to set up a new e-mail account?