Yahoo, Microsoft and Google Face Off in Mailbox Wars

( [email protected] ) Jun 21, 2004 07:11 AM EDT

The Web mailbox wars escalated last week when Yahoo expanded its free e-mail accounts from 4 megabytes to 100 MB, and Microsoft confirmed that it, too, will raise storage limits soon on its free Hotmail accounts.

The email leaders Yahoo and Microsoft have recently engaged in a mailbox war trying to outdo each other by offering more free space and features. Both companies are reacting to Google’s plan to offer 1 gigabyte of free storage through Gmail.

A Yahoo vice president, Brad Garlinghouse said, "What we are trying to do is take storage off the table as an issue.”

Yahoo has generously expanded its free accounts from 4 megabytes to 100 MB which cost users $60 a year just a few months ago. The maximum size of any one attached file has also increased from 3 MB to 10 MB. Yahoo offers twice the amount Google’s service with 2 GB of space and no graphical ads for users who are willing to pay $20 a year.

The paid version of Yahoo Mail will contain 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.

Meanwhile, Microsoft has been making plans to try and outdo its competitor.

Currently some hotmail user accounts have been upgraded from 2 MB to 25 MB. Two new plans offer even more expanded space: a $40 a year option including 50 MB and a $60 a year plan that offers 100 MB.

Kathleen Callaghan, Microsoft spokeswoman, said that she is unaware of the free expanded accounts, but she did confirm that the mail service will be upgraded. "Part of that will ensure that storage won't be an issue," she said.

Microsoft vice president, Yusuf Mehdi, said last week that users will much more innovation from Hotmail and Microsoft's other communication services over the next year.