April 2, 2004 4:28 PM PST

Yahoo promotion upgrades e-mail for some

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A day before Google announced its free e-mail service with 1,000 megabytes of storage, rival Yahoo began singling out e-mail subscribers to get more room at no cost, too.

Yahoo confirmed Friday that it has sent e-mail promotions randomly to some subscribers of its popular Web-based e-mail service. One promotion sent Tuesday upgraded users to 100MB of disk space as of March 31 for free, and gave allowances for sending and receiving larger attachment files using Yahoo.

"As part of continuous promotional testings across the Yahoo network, we began offering some of our loyal customers various offers on Tuesday," Yahoo spokeswoman Mary Osako said. "Like most companies, we're continuously testing a variety of promotions and offers that we extend to our loyal customer base."

Google said late Wednesday that it had developed a new free e-mail service called Gmail that lets people search and store messages in a dramatically new fashion. Central to Gmail, set to launch in public beta in the next month, is enough storage that many people won't ever have to delete messages. Gmail's 1GB of storage is more than 100 times that offered in the free versions of Yahoo Mail and Hotmail.

Yahoo allots free mail subscribers 6MB of storage, offering 100MB for $49.99.

Yahoo's Osako denied that the timing of its promotion was related to Google's new service announcement. The company regularly tests promotions, she said. In November it offered some subscribers a 30-day free trial of Yahoo Premium.

Many analysts said Gmail heralds a broad expansion of Google's business and is a clear shot across the bows of Yahoo and Microsoft. Yahoo and MSN's Hotmail both sell premium mail services that feature additional storage.

Although Google has not yet made accounts available to the media, a description on its Web site said Gmail will rely on search technology to automatically organize and find messages, removing the need for file folders. With a search query, Gmail can scout out any message sent to or received by the user in its archive, showing entire strings of e-mail conversations related to the query, according to the site. Google said the storage allotment means people will never have to delete messages.

Google plans to support the service by serving related ads on Web pages displaying e-mail. It will scan the content of e-mail messages to serve up targeted ads.

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