Microsoft and Yahoo! Issue Responses to Gmail Challenge

Responding to the impending public release of Google's Gmail service, which will offer users a full gigabyte of email storage space, MSN Hotmail and Yahoo! Mail are dramatically increasing their storage allotments. Yahoo!'s updated service debuted late last week, and Microsoft's planned update should be available soon. 
Yahoo! Mail can't quite match Gmail's 1GB offering, but Yahoo! has made a dramatic jump from the earlier 4MB of storage to 100MB, which Yahoo! executives say should be enough for most users. "What we are trying to do is take storage off the table as an issue," Yahoo! Vice President Brad Garlinghouse said, noting that Yahoo! previously charged users $60 a year for 100MB of storage. Yahoo! also raised the email-attachment size limit from 3MB to 10MB, and the company now offers only one paid upgrade package: For $20 a year, users can get a whopping 2GB of storage space. Users who pay for the upgrade don't have to see graphical ads, the company says.
Meanwhile, Microsoft has been quiet about its plans for MSN Hotmail, but the company is slowly rolling out to existing users an upgrade that increases the free storage allotment from 2MB to 25MB, still far short of the Yahoo! and Google offerings. The upgrade won't be Microsoft's full response to Gmail, however. In July, the company will roll out a major upgrade that includes much more storage space, although a Microsoft representative was unable to corroborate the exact amount. "Part of that \[upgrade\] will ensure that storage won't be an issue \[for customers\]," she said.

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