MSN to Boost E-Mail Storage Space

Exclusive In response to rival e-mail services enticing customers with high capacity storage, Microsoft's MSN unit will soon announce its intentions to follow suit, BetaNews has learned.

Redmond executives have been mulling over how to respond to the storage frenzy, and are set to unveil a plan that will go into effect in July.

Although still in beta testing, the launch of Google's free Gmail service heated up the competition by offering customers a whopping 1GB of e-mail storage. Yahoo! fired back this week by boosting customer inboxes to 100MB and unveiling an updated user interface, which Microsoft called "quite good."

"We have been intentionally quiet over this period, as we formulated our plans, and waited to see the Yahoo response, feeling it would be best to see how strong Yahoo's counter would be before going public with our own," Blake Irving, corporate vice president of MSN's Communication Services group, told employees.

Microsoft hopes that by giving customers enough space, it can move the media focus away from storage as a key selling point and reduce the emerging threat posed by media darling Google.

"We are going to respond in a big way and will eliminate email storage as an issue for our users," said Irving.

E-mail is not the only area in which MSN is feeling pressure from competitors. Microsoft has been developing and refining its own algorithmic search engine, and plans to launch MSN Newsbot -- a service similar to Google News -- by the end of the year.