Yahoo promises unlimited e-mail storage

By Micahel Liedtke

updated 7:01 p.m. ET March 28, 2007

SAN FRANCISCO - In another reminder of technology's quantum leaps, Yahoo Inc.'s free e-mail service will provide unlimited storage space to its nearly 250 million users worldwide — a concept that seemed unfathomable just a few years ago.

With the move, Yahoo will trump its two largest rivals in free e-mail, Microsoft Corp. and Google Inc., which currently provide 2 gigabytes and 2.8 gigabytes of free storage, respectively.

(MSNBC.com is a Microsoft-NBC Universal joint venture.)

Yahoo's e-mail users currently get 1 gigabyte of storage. Yahoo plans to gradually lift all space constraints in May, but it will take several months before all of Yahoo's e-mail users have infinite storage space.

Time Warner Inc.'s AOL, the fourth largest e-mail provider, began offering unlimited storage for free last summer.

Yahoo's commitment will require substantially more resources because its e-mail service is nearly five times larger than AOL's.

"We're psyched to be breaking new ground in the digital storage frontier by giving our users the freedom to never worry about deleting old messages again," John Kremer, a Yahoo vice president of mail, wrote in an announcement posted late Tuesday on the company's Web site.

The expansion represents a dramatic shift from Yahoo's e-mail philosophy just three years ago. At that time, Yahoo was offering as little as 4 megabytes of free storage and charging nearly $50 annually for 100 megabytes of storage.

But Google changed the competitive landscape in April 2004 with the introduction of Gmail, which initially offered 1 gigabyte for free before steadily expanding to its current limit of 2.8 gigabytes.

Yahoo and its rivals have been willing to spend millions of dollars on adding storage space because they consider e-mail service a powerful magnet that spurs frequent visits, and thus more opportunities to sell ads. And the cost of storage has been declining for years, making it even easier to give users more space.

Meanwhile, e-mail's ubiquity and the proliferation of digital media — from photos to music — has increased the demand for more storage.

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