Yahoo Fortifies Free E-mail Service Amid Google Challenge

Strategic Insights

Jun 15, 2004 — 1 min read

In a bid to counter Google's foray into the free e-mail market, Yahoo is upgrading its free e-mail service to 100 megabytes of storage, making it 25 times more spacious than its previous capacity of 4 megabytes. The move is also intended to free up millions of previously claimed e-mail addresses, which will be made available again to attract new users. This upgrade comes as Google prepares to offer 1,000 megabytes of free storage through its Gmail service, which has been in a test phase since early April.

Key Takeaways:

Yahoo's free e-mail service has been upgraded to 100 megabytes of storage, a significant increase from its previous capacity of 4 megabytes, although some legacy users may still have 6 megabytes of storage.
The company aims to attract new users by making tens of millions of dormant e-mail addresses available again, which could "attract a lot of interest" according to David Ferris, an e-mail analyst.
Yahoo plans to improve the tools used to search its e-mails and spruce up the service with a cleaner look to match Google's Gmail service.
Brad Garlinghouse, Yahoo's vice president of communications products, explained that the company has been listening to its customers to build the features they want.
Google has not commented on Yahoo's changes or its Gmail service, as the company is pursuing an initial public offering of stock, which requires management and other insiders to remain mum.

Statistics:

100 megabytes: The new storage capacity for Yahoo's free e-mail service.
4 megabytes: The previous storage capacity for Yahoo's free e-mail service.
6 megabytes: The storage capacity for some legacy users of Yahoo's free e-mail service.
1000 megabytes: The planned storage capacity for Google's Gmail service.
£60: The highest bid for a restricted invitation to sign up for an early Gmail account on eBay.
39.8 million: The number of unique users for Yahoo's e-mail service in April.
34.6 million: The number of unique users for Microsoft's Hotmail service in April.
2 megabytes: The storage capacity for Microsoft's Hotmail service.

Sources:

The Associated Press
Nielsen Net/Ratings
Yahoo! Inc.

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