Yahoo Increases E-Mail Capacity

Yahoo has decided size matters when it comes to inboxes: the site is increasing significantly the storage capacity of its free and fee-based Web-based e-mail services.

Those who use the free service will see capacity increase from 4MB to 100MB, while users of the fee-based service will get 2GB.

In addition, Yahoo is simplifying its price range for fee-based e-mail service, which is called Yahoo Mail Plus. It will charge a single price for the service: $19.99 yearly. This new price represents a discount for all subscribers to the service, who are paying $29.99 for 25MB, $39.99 for 50MB, and $59.99 for 100MB.

Yahoo will roll out this increase in storage globally between Tuesday and the end of the year. The new price will be available to subscribers when their current annual agreement ends.

"We're announcing these improvements to our service, with a refreshed user interface and a storage increase. Our goal is to provide a full-featured service, and now we've taken storage off the table. People don't even have to think twice about it," says Terrell Karlsten, a Yahoo spokesperson.

Nudged by Google

Limited storage in Web-based e-mail services has been a headache for many users, whose mail is bounced back if their inbox is at full capacity. This forces users to constantly delete messages to make room for incoming ones.

But in April, Google rocked the Web mail market by announcing a free Web-based e-mail service called Gmail that offers 1GB of storage capacity, enough room to let users forget about the issue of inbox storage. Gmail is still in beta test and isn't generally available, but Yahoo's move is a clear reaction to the competing service's imminent arrival, says Marcel Nienhuis, an analyst at The Radicati Group.

By responding to Google's move with this increase in storage, Yahoo provides sufficient reason for most of its current users to stay put and not jump to Gmail, Nienhuis says.

"Anything above 50MB is plenty of storage, so providing 100MB for free is very generous and pretty attractive. Most users will be very happy with it," Nienhuis says. "The 2GB for the fee-based service is pretty much unlimited storage for all practical purposes."

It's hard to get a user to change Web mail accounts, because switching involves the hassle of notifying all contacts about a new address, changing any listserv memberships, and learning a new service, he notes. Plus, users grow roots into Yahoo mail, because it's integrated with a variety of other Yahoo services, such as calendaring, address book, photo album, and instant messaging, he says.

Also, it remains to be seen how comprehensive and effective Gmail features will be, particularly in areas such as spam filtering and virus protection. Yahoo has put much attention into those areas already, Nienhuis adds.

What Google has started with its announcement of Gmail is the removal of storage as a premium feature for Web-based e-mail services, Nienhuis says. Until now, providers of Web-based e-mail services such as Yahoo and Microsoft with its Hotmail service, used storage as a feature to convince users to upgrade to a fee-based service, Nienhuis says.

"Increasing their storage limit is what people have been paying for premium service for the past few years, and you won't see that anymore. That's over, and that's a pretty big change," he says. He expects Microsoft will soon make an announcement similar to Yahoo's.

Other Enhancements

Yahoo is also announcing other enhancements to its e-mail services on Tuesday. Among the new features:

  • A redesigned user interface for both services;
  • For users of the free service, an increase in the maximum size of a single message from 3MB to 10MB;
  • An improvement in the back-end system powering the search function of the two e-mail services, which should result in faster query results. This existing search feature lets users search the full-text and subject lines of the e-mail messages in their inbox by keyword;
  • The availability of 50 million e-mail handles or names that had at some point been claimed by users but that have been dormant for years;
  • The removal of all graphical ads from the fee-based service; these ads will continue to exist in the free service; the only ads that will appear in the fee-based service will be text-based ads promoting Yahoo offerings only.

The improvements will also be implemented on Tuesday on Yahoo's Spanish-language portal Yahoo en Espanol.

Note: has a partnership agreement to provide content to Yahoo News.

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