May 13, 2004 2:53 PM PDT

Yahoo boosts free e-mail storage to 100MB

Web portal Yahoo will begin offering "virtually unlimited storage" for its paid e-mail customers and will upgrade free users to 100MB, an executive said Thursday.

The upgrade is part of an overall enhancement for Yahoo Mail that will launch this summer. Besides additional storage, the service will get a face-lift and tie in more Yahoo-branded services, such as Photos and Messenger.

The announcement comes a month after search rival Google said it would launch a free e-mail service called Gmail that offers 1GB of storage, considerably more space than free versions of Yahoo Mail and Microsoft's Hotmail. Yahoo currently offers 4MB of storage to free users of its e-mail service.

The company's decision to boost its e-mail storage is not surprising. A day before Gmail details were unveiled, Yahoo sent e-mails to some customers in hopes of gauging their interest in receiving 100MB of storage.

The company said the e-mail was just a typical consumer survey for its "loyal consumer base" and denied that it had any relation to the news of Gmail.

Gmail has sparked considerable controversy, because Google plans to scan people's e-mails to serve ads based on message text. The plans have drawn fire from privacy advocates and industry leaders alike.

Details of Yahoo's storage upgrade were revealed by Jim Brock, the company's senior vice president of communication and consumer services, during Yahoo's presentation to Wall Street analysts.

"The objective here is to make storage quotas irrelevant to users," Brock said.

The competition between Yahoo and Google continues to heighten. In February, Yahoo dropped Google as its algorithmic search provider and instead launched its own technology. The companies also compete over distribution deals, as evidenced in Yahoo replacing Google search on CNN.com this week.

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