Hotmail, Yahoo! Step Up Mailbox Rivalry

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florida-state-univers/" class="creditline">LESLIE WALKER
FS View
Florida State Univers

The Web mailbox wars escalated last week when Yahoo expanded its free e-mail accounts from four megabytes to 100 MB, and Microsoft confirmed that it, too, will raise storage limits soon on its free Hotmail accounts.

Both are reacting to Google’s plan to offer 1 gigabyte of free storage with its new Gmail service, which is still in trial form with a limited number of users.

“What we are trying to do is take storage off the table as an issue,” Yahoo Vice President Brad Garlinghouse said.

Just a few months ago, Yahoo charged $60 a year for 100 MB of storage. Starting last week, that much storage comes free with every account (and the maximum size of any one attached file is now 10 MB instead of 3 MB). The company also consolidated its various extra-cost mail services into one $20 per-year plan, with no graphical ads and with a hefty 2 GB of mail storage.

That’s twice what Google is planning. Yahoo said its paid version contains more features than Gmail, including tighter spam filtering and the ability to download messages with standard e-mail programs.

Yahoo also streamlined its mail service’s interface and search features.

Microsoft, meanwhile, has quietly been expanding the storage it offers to at least some users of its free Hotmail service to 25 megabytes, up from the 2 that were available before. Users of these expanded accounts can buy still more room with two new “extra storage” plans: a $40 per-year service that includes 50 MB, and a $60 per-year option that allows 100 MB.

But other users continue to get only 2 MB of storage, and an “All About Hotmail” page at the site shows the old amount as well. A new account opened on Friday afternoon also was limited to 2 MB.

Microsoft spokeswoman Kathleen Callaghan said she had not heard of any free accounts getting more storage.

But she did confirm that the company has plans in the works to beef up Hotmail: “Part of that will ensure that storage won’t be an issue,” she said. And a Microsoft vice president, Yusuf Mehdi, said last week that users will see a ton of innovation from Hotmail and Microsoft’s other communication services over the next year.

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