Google's Email Arms Race

Editor's note: After publication, Google said that the "terabyte of storage" referred to in this article was, in fact, a bug, and not a response to Yahoo! or Lycos Europe.

Don't doubt it, Fool. Your personal data is worth big bucks in the information age. Need proof? Look no further than the controversy kicked up by Google's April Fool's Day announcement of Gmail, which excited geeks around the world like nothing since the floppy disk. Reason? A free gigabyte of email storage, paid for by an innovative message-snooping system that some observers -- including yours truly -- find a bit too Admiral Poindexter-ish.

To judge by the preponderance of public reaction, including that of my colleagues Alyce Lomax and Rick Aristotle Munarriz, most people are really jonesing for those megabytes. And that appetite for memory is driving an industry arms race.

Yahoo! (Nasdaq: YHOO  ) recently announced that it would up its email storage. And today, Lycos Europe unveiled the first real gigabyte email service to hit the market. Of course, there's a key difference from Gmail. Yahoo and Lycos users will need to pay up for the online elbow room. Public statements by Lycos about advertising and privacy concerns show that the firm is hoping to capitalize on controversy and steal a bit of the Gmarket.

It won't work. Free is free, folks. Aside from flat-earthers like me, most people don't care about the ads, and that's why this is still Google's game. The company's stealth response to the gathering email threat was to quietly bump up some Gmail users' storage to a full terabyte. That's a million megabytes. That's a thousand gigabytes. That's more than most of us will ever have in our home computers. That's brilliant PR.

It's amazing to watch these firms scramble for our monitor-watching eyeballs. I can't wait to see what happens if Microsoft's (Nasdaq: MSFT  ) Hotmail ever chooses to enter the fray.

Frightened of the frenzy over the Google IPO? Find lesser-known stocks withMotley Fool Hidden Gems.

Fool contributor Seth Jayson used to work as a data miner. That's why he'll be storing his correspondence on his own machines, thank you. He owns no company mentioned. View his Fool profile here.

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