If you receive a email from someone and if he is online, then instead of replying by email you can reply by chat. It also groups your chat history in the same conversation as the message you’re chatting about.
How to “Reply by Chat” ?
- Log in to your Gmail account.
- Open the message you’d like to chat about, and make sure the sender is online and available to chat.
- Click Reply by chat at the bottom of the message.
- A new chat window will open displaying the subject of the email you’re discussing.
Source: Official Google Blog
