Microsoft Bulks Up Email

Hear that sound in the distance? It's the approaching battle drums of war. The Great Email Wars.

The first shot was fired by Google back in April. It announced that it was offering a gigabyte of email storage -- for free. That was followed by a return volley by Yahoo! (Nasdaq: YHOO) when it said it would up its free email storage to 100 megabytes. The last shot across the bow was loosed by Microsoft (Nasdaq: MSFT), as it announced it will offer 250 megabytes of storage to its MSN Hotmail accounts.

Like the Battle of Five Armies in J.R.R. Tolkien's The Hobbit, Lycos Europe has said it will offer a gigabyte of storage, and Ask Jeeves (Nasdaq: ASKJ) will now give its users 125 megabytes of space.

In the escalating email wars, it's the users who are winning the war.

It's not just about providing email space anymore. It's really about creating a sticky environment to improve a user's experience. MSN Hotmail will also include virus scanning and email cleaning; Yahoo only scans. Both will integrate a calendar feature in the service -- something that Google lacks. And both will delete graphical ads from the paid email service, though they'll remain in the free service.

But they all pale in comparison to Google's Gmail, which is offering its vaunted storage capacity for free. To get that kind of storage from Microsoft, Yahoo, or Lycos, you gotta pay up. Call it the Wages of War.

These companies believe that if they provide users with a whole experience, their entire portal becomes more valuable, but I'm not convinced of it. I have a Hotmail account, but I never use the rest of the MSN service. I use Yahoo! Finance to conduct stock research, but I never even considered opening up an email account. Google has become the be-all and end-all search tool for me -- its toolbar is firmly ensconced on my browser -- but a gigabyte of storage is just wasted space to me. It's estimated that so much room is equal to 500,000 pages of messages. Who gets that much mail?

Sitting on the sidelines, watching the war from a hilltop and drinking a mint julep (OK, maybe a Silver Bullet from Coors (NYSE: RKY)), I'm content to let the combatants outgun one another and reap the windfall.

Fool contributor Rich Duprey has read The Lord of the Rings more than 15 times. He does not own any of the stocks mentioned in this article.