Microsoft is increasing the storage limit for its Web-based e-mail service, surpassing competitor Google's limit but far short of Yahoo's unlimited storage.
The limit for a free Windows Live Hotmail account will increase from 2GB to 5GB. The change will be rolled out to users over the next few weeks along with a series of other upgrades, wrote Ellie Powers-Boyle, a Microsoft program manager, on a company blog.
Google offers around 2.8GB of storage space for a free account. Last week, Google began selling storage space that can be used for either its Gmail or Picasa photo sharing services for $20 a year for another 6GB as well as more expensive plans.
Under the new changes, Microsoft will let users store 10GB of e-mail data for a $14.99 annual subscription. Those subscribers will also get a new feature: the ability to forward e-mail from their Hotmail account to a Gmail or other e-mail account.
Unfortunately, users of the free service will only be able to forward e-mail from one Hotmail account to another Hotmail account, essentially blocking them from a quick migration to another free e-mail service.
Another new Hotmail option is the ability to shut off the "Today" feature, which shows top news and features stories on Microsoft's MSN portal. It appears after a user logs into their Hotmail account.
Microsoft is also changing some of Hotmail's security features. One new feature is a link, "Report phishing," that alerts Microsoft to a possible scam Web site linked to an e-mail.
Powers-Boyle also wrote that Microsoft is trying to make Hotmail run faster. The company will also increase the amount of time that messages are stored in the junk and deleted items folders before being automatically flushed, although no specific time period was given.
Other improvements include: Better performance for Hebrew and Arabic writers, a feature that stops the duplication of contact information, and the ability to set an automated response.
Hotmail increases storage space
Hotmail is boosting the amount of storage space for users of both its free and paid e-mail service. From July the basic Hotmail allowance will be boosted to 250MB and paying customers will get two gigabytes.
The move is widely seen as a response to Google's GMail service which gives all users a gigabyte of storage to keep all their messages.
With the announcement, Hotmail becomes one of a growing pool of e-mail firms offering users huge amounts of storage.
Currently, paying customers of Microsoft's Hotmail get at least 10MB of storage space and those who use it for free have 2MB for their old messages.
Boosting storage limits means Hotmail must revamp its charging system which is based around a "pay more to store more" system.
The new service with the boosted storage will be called Hotmail Plus and will cost $19.95 per year. Users who currently pay more for storage will be moved across to this service.
Users of Hotmail Plus will also be able to send messages with attachments up to 20MB in size.
In a related announcement Microsoft said that it will also start using anti-virus software to spot infected e-mails sent to or from its web-based mail service.
Microsoft's announcement is only the latest response to Google's creation of its GMail service that gives all users a gigabyte of storage and encourages people to keep, rather than delete, old e-mail messages.
Soon after Google's announcement in April Yahoo said it would start offering 100MB to non-paying users and two gigabytes to paying customers. It too changed its charging system and rolled many add-on services into a single subscription package.
Mac users are not losing out either. Spymac is offering users of its Wheel service 1GB of storage space for $39 per year.