Yahoo! to offer unlimited storage to email users

Yahoo! Inc. (NASDAQ: YHOO) has announced that it will be giving customers of its Yahoo! Mail web-based email service unlimited storage starting in May. Yahoo! started playing catch-up to Google Inc. (NASDAQ: GOOG) a few years ago in the amount of space it provides to email customers. Now this latest move may make Google and Microsoft Corp. (NASDAQ: MSFT) step up to the plate and provide unlimited email storage as well.

Yahoo! Mail provided a measly 4 Megabytes of email storage back in 2004. Then Google's Gmail came along with a free 1 Gigabyte of storage and caused both Yahoo! and Microsoft to up their email size limits to match Google's. Google has since stepped up its completely free Gmail email service to over 2.8 Gigabytes, while Yahoo! Mail remained at 1 Gigabyte (for free, anyway).

The fact that Yahoo! Mail is, by far, the largest email provider on the planet makes this announcement quite influential. Will customers start sending more and more email messages containing huge video and picture attachments now that they have unlimited storage? Probably not, but Yahoo!'s move to give unlimited email storage away for free will most likely give it the best possible PR, while keeping Yahoo! Mail users glued to other Yahoo! properties. My guess is that Yahoo! knows this pretty darn well.