Hotmail bumps up free email to 250MB

Microsoft has said that it will boost storage limits in its Hotmail web email service, a move intended to counter similar steps taken by rivals Google and Yahoo.

The upgrade will increase Hotmail's free email storage limits from 2MB to 250MB and its paid email service, which costs $19.95 a year, from 10MB to 2GB. The changes will begin in early July.

"With these new offers, storage will not be an issue for MSN Hotmail customers," Blake Irving, corporate vice president of communication services for MSN, said in a statement.

The storage follows similar announcements from Google and Yahoo. The storage boost started when Google announced in April that it plans to launch a new email service called Gmail that will give people 1GB of storage for free. The service has attracted some controversy, because it will serve advertisements based on keywords found in the text of peoples' email messages.

Indeed, Google's initial steps into storage increases countered the industry's trend to charge extra for more memory. Over the past few years, Yahoo and Hotmail have both taken steps to decrease memory in hopes of convincing free users to become paying subscribers.

Earlier this month, Yahoo launched its own upgrade to 100MB for free users and 2GB for its paid users. The company said the changes would make email storage a "nonissue".

"We'll remain focused on what emailers want and need, and people can expect to see a number of new enhancements to Yahoo Mail in the coming months," Yahoo spokeswoman Mary Osako said in response to the Microsoft announcement.

Ask Jeeves also plans to grant its email subscribers more storage room. Earlier this year, the search company acquired Internet Search Holdings, including My Way, The Excite Network and iWon.com, which all serve web surfers with free email. Ask Jeeves plans to give each of the sites' email subscribers 125MB of free storage, up from an allottment of 3MB to 6MB previously.

Separately, Microsoft said it will offer free antivirus software to scan emails before they appear in a user's in-box.

Jim Hu writes for CNET News.com. News.com's Stefanie Olsen also contributed to this report.