Email isn't just for your virtual inbox anymore. Yahoo! (NASDAQ:YHOO) is beefing up its free Yahoo! Mail this morning with enhanced performance and integrated social features.

Stateside users will now be able to send free text messages to cell phones through participating mobile carriers. The offering is also available in Canada, India, and the Philippines. It should be a popular feature for those online, given the often cumbersome process of pecking out text messages on an actual cell phone.

The new Yahoo! Mail also integrates the combined IM platform of Yahoo! Messenger and Microsoft's (NASDAQ:MSFT) Windows Live Messenger. The service is also rolling out search, performance, and customization refinements, though the original Yahoo! Mail Classic will be available for those who like to kick their email old school.

Web-based mail has certainly come a long way. It was the undisputable turf of Yahoo! and Microsoft's Hotmail a couple of years ago. They still rule the roost, though the introduction of Google's (NASDAQ:GOOG) Gmail in 2004 and the push to offer free non-subscription services at Time Warner's (NYSE:TWX) AOL have heated up the competitive landscape.

The initial reaction to these new entrants was to free up storage restrictions. Gmail made headlines when it offered a full gigabyte of email data capacity. Yahoo! Mail and Hotmail were capped at four megabytes and two megabytes, respectively.

It's been off to the races since then, with Yahoo! and AOL now offering unlimited storage. Why not? Storage is cheap and Google has proven that you can monetize old email by serving up relevant new ads alongside it.

So now that capacity restrictions have nowhere else to go (save for tighter controls on the size of attachments being sent), the push is on for sticky features to make a particular service stand out.

Fancy that? Paper mail gets more expensive with every postage rate increase, while free Web-based missives keep getting better. Somewhere out there, a tree is texting its gratitude.   

Email worthy Yahoo! news:

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Longtime Fool contributor Rick Munarriz realizes that trees don't get much of a break from folks who print out their e-mails. He does not own shares in any of the stocks in this story. Rick is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.