The domino effect Google started in April when it announced plans for a free email service with 1GB of in-box storage continues with Microsoft's promise to boost Hotmail in-boxes to 250MB from the current 2MB.

The storage increase for Hotmail will be rolled out starting in July according to Lisa Gurry, director of Microsoft's MSN internet division. "The landscape has changed regarding users' need for extra email storage and we don't want storage to be an issue for any Hotmail user," she said.

Gurry declined to reveal the geographical rollout schedule but said Microsoft plans eventually to extend the bigger in-boxes to all 170 million Hotmail subscribers.

Asked if Microsoft was responding to Google's 1GB email service, which is still in a test phase, Gurry declined to address that service specifically, saying only that Hotmail is responding to customer feedback.

Yahoo last week announced plans to boost the in-box size for its free web-based email service, from 4MB to 100MB.

Other enhancements to the Hotmail service include the ability to send attachments up to 10MB in size, up from a previous email maximum size of 1MB including attachments and the cleaning of viruses in infected outgoing or incoming email messages, she said.

Previously, Microsoft scanned all outgoing and incoming Hotmail email messages, but didn't clean them, she said. All Hotmail users worldwide will receive this feature in July, she said.

Microsoft provides this antivirus service in partnership with Network Associates's McAfee unit. As it has done in the past, Microsoft will continue providing antispam features in Hotmail, in partnership with Brightmail.

As providers of web-based email compete to retain subscribers and win new ones, they should focus on features beyond in-box capacity, said Allen Weiner, a Gartner analyst.

"We're having a mini-war in the free email area right now and I think the war has been focused in the wrong direction," he said. "For each of the major free email providers to compete by offering more and more space doesn't seem sensible to me. ... Giving users more storage space doesn't really do much except create more clutter."

All the extra in-box space will be of little use if the users aren't given tools to categorise and retrieve messages, which is why Microsoft is doing the right thing with its plans to develop broad search functionality that covers the web, email and documents in PCs' local hard drives, he said. Then the email service should be complemented with other internet services, such as online calendars.

Microsoft also announced a new fee-based email service called MSN Hotmail Plus, which will offer users 2GB of in-box storage and the ability to send 20MB attachments for US$19.95 per year.

Previously, Hotmail users could buy extra storage on top of the standard 2MB that the free service features at different price levels, starting at $19.95 per year for 10MB of in-box storage and a maximum attachment size of 3MB up to the highest tier, which at $59.95 per year offered 100MB of storage and a maximum attachment size of 20MB. Hotmail Plus users also get the benefit of not receiving graphical advertisements.

Yahoo has opted to do a similar thing by eliminating its tiered extra storage offers for its web-based email service, offering instead one fee-based plan of $19.99 per year which gives users 2GB of in-box storage.