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By Jim Hu, 15 June 2004 09:00

NEWS Yahoo has begun offering 100MB of extra storage for users of its free email service as part of an overall redesign of its mail service.

Along with the 100MB boost, Yahoo will upgrade Mail Plus paid users to 2GB of storage and lower its yearly subscription from $29.99 a year to $19.99. Other a la carte services, such as POP email forwarding, will consolidate under this plan and no longer be sold on a standalone basis.

The storage boost comes as no surprise. Yahoo arch-rival Google in April announced plans to launch a free email service called "Gmail" with 1GB of storage. The upcoming launch of Gmail has changed the landscape for free-email users, but also raised privacy concerns because of Google's decision to serve advertisements based on scanning the content of email text. Yahoo executives last month announced the company would offer its own storage upgrade as part of overall changes to the service.

Brad Garlinghouse, Yahoo's vice president of communications products, said the changes were enacted to make "email storage a nonissue". He acknowledged that competitive forces were a factor as well.

"There are new competitors on the scene, and we want to make sure the things we're focused on are important with users," Garlinghouse said.

The new storage limits amount to a strategic turnaround for Yahoo. In 2002, the company began charging for various tiers of storage size for its photos and briefcase products. Yahoo also lowered its free email memory from 6MB to 4MB for new members.

Aside from being able to keep more emails, most changes to the new Yahoo Mail are cosmetic, with emphasis on making the service sleeker and faster. The product will give greater emphasis to a mail search bar at the top of the page. Unlike Google, the Yahoo search bar will not search email text to serve advertisements, but will allow people to more easily hunt for buried correspondence.

Garlinghouse also said the company will free 50 million identities into circulation. That means identities that have remained dormant will become available again for general use. While Yahoo has maintained a policy of recycling user identities after six months of dormancy, the company has taken a "very conservative approach" to offering these names back to users, Garlinghouse said.

Jim Hu writes for CNET News.com