Yawns, cheers for 'unlimited' inbox storage

As webmail providers continue their years-long race to increase their inbox storage, some analysts and users are cheering them on, while others question whether the emphasis on this issue is warranted and even if it can become counterproductive.

Last week, Yahoo pledged that, starting in May, it will begin to offer unlimited storage to Yahoo Mail users, something AOL LLC's AOL Mail has had since September of last year. Meanwhile, Google continually increases Gmail's storage, which now is at over 2.8G bytes per user.

Until about three years ago, most major webmail providers offered very limited storage, often in the 2M byte to 10M byte range. This forced users to regularly delete or download their e-mail messages instead of keeping them on the webmail providers' servers. That all changed in April 2004 with Google's introduction of Gmail and its then-unprecedented 1G-byte inbox, which ignited the storage race.

Depending on who you ask, the importance placed by vendors on inbox size is either justified or exaggerated.

"Large storage is nice but not necessarily a huge consumer priority. When you give consumers a list of features and ask them to prioritize what's most important to them, storage is kind of middle of the road," said Joe Laszlo, a Jupiter Research analyst. Instead, what's vital to the average person is security, namely protection against threats such as fraud, spam, phishing and malware, Laszlo said.

However, Teney Takahashi, an analyst with The Radicati Group, thinks that as storage has grown, webmail services are more than tools for exchanging messages because their gigantic inboxes have become repositories of important data and documents for users.

"People are storing purchase documents, contact information, bank statements, utility bills, and it's very convenient for them to have all this historical data available in their e-mail inbox," Takahashi said.

Users seem equally split. Dan Moore, a Yahoo Mail user since 2002, cares little about this week's unlimited storage announcement because he's not even close to reaching the 2G-byte limit of his inbox.

"As far as I can tell, I'll never need to delete another e-mail message, but if I did run into a limit, it'd be very easy for me to pull down the messages via the POP interface and store them on a personal hard drive," he wrote in an e-mail interview.

Others, like Chaim Danzinger, a freelance video editor, welcome Yahoo's move. Danzinger, who uses Yahoo Mail for personal and work matters, is close to hitting his 2G-byte ceiling: His inbox is 90 percent full.

"I get many attachments, and they are sometimes quite large, so having extra storage is a great addition," he wrote in an e-mail interview. "I like to not have to delete messages which I may need at a later point, be it an attachment, a memo, or anything else, so this extra storage space only makes things easier for me."

Still, Jupiter's Laszlo warns that the limitless inbox may be a double-edged sword for some users if it creates a vast and disorganized repository of messages. Providers must not only provide tools to search and categorize messages, but also proactively educate people on how to use them, he said.

"Storage by itself doesn't really work. I don't think consumers are conditioned to the idea of searching their e-mail archive yet," Laszlo said. "It doesn't do the consumer any good if they have every e-mail from the past five years but they can't find the one they need."

Providers are motivated to offer vast e-mail storage not only to keep up with competitors, but also because the more data users keeps in their inboxes, the less likely they will be to abandon their accounts, Takahashi said. "It's a way to increase the stickiness of their service," he said. This in turn translates into more ad revenue for them, since webmail services are advertising vehicles, he said. At the same time, the cost of storage is plummeting, so the investment required to provide larger inboxes is a fraction of what it was five years ago.

Laszlo recommends that providers consider increasing the size of messages that can be sent and received, considering that people are sending large video and photo files via e-mail more frequently each day. Right now, most webmail providers cap message sizes at between 10M bytes and 60M bytes.

This is something Danzinger would be interested in seeing Yahoo do, although he realizes the effort would have to involve various vendors. "I think raising the size limit on attachments would be a great addition. ... However, one must keep in mind the size limit on the receiver's end, which will need to match that of the senders," he wrote.

Of course, despite pledges of unlimited storage, webmail providers have in place what they call "anti-abuse" provisions, which prevent people from using the free storage apart from engaging in genuine e-mail activities.

"We'll let our customers have unlimited e-mail storage for what we consider traditional or proper usage of Yahoo Mail: for sharing information or content with other people, including rich media. But it's not for backing up your hard drive," said John Kremer, Yahoo Mail's vice president.

At AOL, the system periodically asks users to enter a randomly generated set of letters and numbers to prevent automatic saving of messages. Software pirates often write scripts to automatically save messages in order to distribute massive amounts of illegal software, said Roy Ben-Yoseph, AOL's vice president of AOL Mail products.

In addition to the increase in inbox size, there have been other innovations in webmail in recent years, such as the interface of Yahoo Mail's beta version, which acts with the responsiveness of a PC application, Laszlo said. However, as pledges of unlimited storage become more common, Laszlo forecasts a lull in webmail improvements.

"The webmail industry goes through cycles where there's a large amount of innovation and things then quiet down for a while, before there's another burst of innovation. We're kind of at the tail end of the innovation spurred by Gmail," he said.

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