Email is just one area in which Yahoo! (NASDAQ:YHOO) hasn't always received flattering comparisons when stacked up against its Web-search rival Google (NASDAQ:GOOG). But with its announcement of a new photo email service that will let users make more efficient use of their allotted email space, Yahoo! might just earn some accolades.

When Google rolled out Gmail, Yahoo! responded, but its moves were slow. It remained mired in megabyte territory for nearly a year before finally increasing storage to a gigabyte, only to have Google announce its plan to double users' capacity to 2 gigabytes.

The drive for more space is not simply a game of one-upmanship, since people can always find ways to fill up all that storage. This is especially true now that digital photography has become all the rage, and exchanging those photos with friends and family via email requires a lot of room. That's why Yahoo! announced yesterday that it has introduced a beta version of a service called PhotoMail. The service allows users to attach a whopping 300 photos into a single message by simply dragging and dropping. The photos are also comparatively "light" -- each thumbnail sucks up a mere 3 to 5 kilobytes, compared with 800k for a regular photo attachment.

No one would argue that Yahoo! can rest easy with Google nipping at its heels. But Yahoo! remains the biggest Web-based email service, with 64 million unique monthly users, according to comScore Media Metrix, a service that measures Internet audiences. With innovations like PhotoMail, Yahoo! stands a good chance of being able to retain email users' loyalty even as it lags Google in the storage race.

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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.