Sometimes you find out you've infiltrated the highest levels of government in the oddest ways. Over the weekend, Illinois Governor Rod Blagojevich had a garage sale to get rid of the junk piling up at his house. And there it was, out in the driveway amidst raggedy Christmas wreaths, an old Dustbuster, a copy of the 1994 Illinois state budget -- the governor was selling an old edition of The Motley Fool Investment Guide for 50 cents.

Fifty cents! Certainly, that's a steal for all the knowledge imparted in that book. Governor, thanks for reading. And if you would like the new edition, surely we can get a signed copy to you.

In today's Motley Fool Take:

Yahoo! Kicks It Up a Notch

By Alyce Lomax (TMF Lomax)

When archrivals take aim at each other, oftentimes, the consumer wins. This is true again, since Yahoo!(Nasdaq: YHOO) revealed at a meeting late last week that it will up the ante in terms of how much storage it offers to users of its free email service before it's considered a "premium" (read: paying) service.

As you recall, Google caused an April Fool's Day stir when it said that it is testing its own free email service, Gmail, which offers a gigabyte of storage as well as targeted ads that caused some privacy issues. (I still stand by my opinion that the privacy arguments were overblown -- talk about feeling alone, until Foolish colleague Rick Munarriz hit on several other reasons not to get all bent out of shape about Gmail.)

Well, now Yahoo! -- which, until now, only offered four to six megabytes of storage space to its users for free before upselling a premium service -- has sweetened the deal by offering 100 megabytes of space free of charge, which it plans to implement this summer. (For anyone who thinks that Yahoo!'s Web-based email platform is so much less "evil" than Google's, a Foolish reader reminded me of yet another aspect: Both Yahoo! and Hotmail also scan incoming emails via machine, scanning for viruses and spam.)

It's an aggressive move for a company that not only feels the heat from Google, but also faces intense competition from Microsoft's(Nasdaq: MSFT) MSN service which includes Hotmail, Time Warner's(NYSE: TWX) America Online, and of course, loads of ISPs like EarthLink(Nasdaq: ELNK). If Yahoo! makes the move to offer more free storage space, it's a pretty good bet that Microsoft's Hotmail will soon have the same feature.

It may make things a little tougher for Yahoo!. While the Internet company has had outstanding fortunes lately, it's banking on the revenue potential of funneling more paying subscribers for its premium services, and email storage was one of those value-added services. On the other hand, it obviously can't afford a significant defection from its mail, if enough users are convinced that despite the targeted advertising, Gmail's gigantic storage is an offer they can't refuse.

This couldn't come at a better time for users, considering the increasing sophistication of the Internet and the copious amounts of storage space that requires. (Think of those digital pictures you probably receive -- those attachments alone can put a significant dent in four to six megabytes of storage.) Regardless of what you think of Google's potential as an IPO (and Fools are already having at it in the Fool Community), this is an important illustration of Google's power in the marketplace right now.

Alyce Lomax does not own shares of any of the companies mentioned. She thinks some of Gmail's functionality sets it apart from the rest.

Discussion Board of the Day: Yahoo!

According to USA Today, Yahoo!'s chief operating officer said at its meeting, "We know where the Internet is going." What do you think? Is its Life Engine marketing campaign a persuasive campaign to steal Googlers? Share your opinions on the Yahoo! discussion board.

Ta rget Shifts Aim

By Seth Jayson

After a major success, say, mowing the lawn without losing a toe or installing a new light fixture without starting a fire, I like to kick back and revel in the accomplishment. Not so for the management at America's No. 2 discount retailer, Target(NYSE: TGT).

Though analysts and market measurers have been reporting lower consumer spending over the last few weeks, Target turned in better-than-average comps, and that was only the beginning of the successes. After delivering some stunning numbers last week, even outperforming rival Wal-Mart(NYSE: WMT), the retailer isn't content to just watch the dust settle.

Target's latest move involves secret project "P2004." OK, it's not exactly a secret project, despite the 007-ish name, but this revamp plan is already seeing successes and the lessons are trickling down to Target's stores. The Colorado prototype puts more food into the stores to increase traffic, a la Super Wal-Mart. That could spell more bad news for the already-ailing grocery industry.

The concept also reorganizes the location of some stock in order to increase sales. For instance, popular items like diapers are located in special themed sections to help drive sales of bigger-ticket items like clothes, furniture, strollers, and other items.

In the latest conference call, management said it was too early to gauge the financial success of the project, but the company has already retrofitted 80 stores with P2004's basic features, and it plans to do a similar remodel to 130 more. By year end, it hopes to install the full redesign at 200 more stores.

As I head out the door for a few groceries and tennis balls for the dog, this shopper thinks the firm is on the right track. Target's stores are already more fun and stylish than those of its competitors, and if P2004 can both increase traffic and heighten the shopper's average tab, shareholders will be well rewarded. Target's recent overachievement may be only the beginning.

Fool contributor Seth Jayson loves getting discount togs that are actually kind of hip. He owns no stake in any company mentioned. View his Fool profile here.

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Lo we's Keeps It Going

By Phil Wohl

The country's second-largest home-improvement retailer, Lowe's(NYSE: LOW), reported first-quarter earnings today that signal strength in an industry nearing its peak. The North Carolina-based retailer had a better-than-expected quarter as it nailed earnings of $0.57 per share, which bettered last year's EPS of $0.53 and the consensus estimate of $0.54.

First-quarter sales were up 22%, keyed by a 9.9% increase in comparable-store sales. The company grew across all divisions, but really turned the screws in its outdoor power equipment and kitchen cabinet segments.

Lowe's earnings should serve as a foreshadowing to rival home-improvement retailer Home Depot(NYSE: HD), which reports its first-quarter numbers tomorrow. The news also should serve as a warning to fellow retailers Target(NYSE: TGT), Wal-Mart(NYSE: WMT), Circuit City(NYSE: CC), and Best Buy(NYSE: BBY) that consumers are starting to focus their spending on items that retain value.

Companies are increasingly mentioning skyrocketing gas prices and rising interest rates as huge factors in consumers' ultimate discretionary income. While these issues will undoubtedly make people nervous, I think that you are likely to see a more selective consumer, not a population of passive shoppers.

I also expect the retail environment to become even more competitive as retail companies fight for every available dollar. The constants are that houses will need renovation and appliances will break down, so consumers must spend money on basic necessities.

But, will consumers continue to dig deeper in their pockets for cosmetic changes and other nonessential upgrades? If gas prices climb toward $3 and Greenspan removes his finger from the interest rate dike, then that ugly green floral wallpaper might necessarily stay around a little longer. This could translate into slower sales growth and a more difficult earnings environment for Lowe's and other retailers.

Fool contributor Phil Wohl spent more than 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.

Quote of Note

"Some cause happiness wherever they go; others, whenever they go." -- Oscar Wilde

Mo re on Today

You may be getting a dose of sin where you least expect it. Mathew Emmert show you how previously naughty stocks are diversifying, but are they cleaning up their acts? Read More Sin in Sin Stocks to find out.... And Bill Mann says don't bury your head in the sand when things go badly.

In other news:

For a list of all our stories from today, see our Today's Headlines page.