To Yahoo, size matters, specifically as it relates to the storage capacity of its e-mail users' in-boxes.
Yahoo plans to announce on Tuesday that it 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 4M bytes to 100M bytes, while users of the fee-based service will get 2G bytes, the company said.
In addition, Yahoo is simplifying pricing for its fee-based e-mail service, which is called Yahoo Mail Plus. There will only be one price for the service: US$19.99 per year. This represents a discount for all subscribers to the service.
The increase in storage will be rolled out globally between Tuesday and the end of the year. The new price will be available to subscribers when their current annual agreement ends, Yahoo said.
"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," said Terrell Karlsten, a Yahoo spokeswoman.
Limited storage in Web-based e-mail services has been a headache for many users, who see messages sent to them get bounced back if their in-box is full. This forces users to constantly delete messages from their in-box to make room for incoming ones.
But in April, Google rocked this market when it announced it was developing a free Web-based e-mail service called Gmail with 1G byte of storage capacity, enough room to let users forget about the issue of inbox storage. Gmail still isn't generally available, but Yahoo's move is a clear reaction to the imminent arrival of that competing service, said Marcel Nienhuis, an analyst at The Radicati Group.
By responding to Google's move with this increase in storage, Yahoo will give a good enough reason for most of its current users to stay put and not move over to Gmail, he said. "Anything above 50M bytes is plenty of storage, so providing 100M bytes for free is very generous and pretty attractive. Most users will be very happy with it," Nienhuis said. "The 2G bytes 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 the new e-mail address and getting acquainted with a new service, he said. 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 said.
Also it remains to be seen how comprehensive and effective Gmail's set of features will be once it becomes generally available, particularly in areas such as spam filtering and virus protection, which are areas in which Yahoo has put much attention, Nienhuis said.
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 said. Until now, providers of Web-based e-mail services such as Yahoo and Microsoft had used storage as a feature for users to upgrade to their fee-based service, Nienhuis said.
"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 said, adding that he expects Microsoft to soon make an announcement similar to Yahoo's.
Yahoo is also announcing other enhancements to its e-mail services on Tuesday, including:
-- a redesigned user interface for both services;
-- for users of the free service, an increase in the maximum size of a single message from 3M bytes to 10M bytes;
-- 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 search feature is an existing one, and lets users search the full-text and subject lines of the e-mail messages in their in-box 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
Users in the following markets will receive the redesigned user interface and the increase in free storage to 100M bytes on Tuesday: U.S., U.K., Ireland, France, Germany, Spain, Italy, Argentina, Mexico, Brazil, Hong Kong, Singapore, Australia, New Zealand, and South Korea.