Microsoft also said it will roll-out free e-mail and anti-virus protection to all the 170 million MSN Hotmail customers worldwide that will both scan and clean incoming and outgoing e-mail for viruses and worms before they can enter a customer`s inbox.
The changes will start early in July, Redmond, Washington-based Microsoft said.
Yahoo earlier this month made good on a promise to boost the storage it provides to users of its e-mail service, raising the stakes in the e-mail war with Web search rival Google. Google has announced plans for its Gmail service that gives users 1GB of free storage, far more than offered by Yahoo or Microsoft`s e-mail services.
"The playing field has changed," said Blake Irving, VP of communication services and member platform for MSN. "We are going to take storage off the table as an issue."
Microsoft will now boost storage to 250MB for users of its free MSN Hotmail and also increased the size of attachments that can be sent with e-mails, to 10MB from 1MB previously. Users of the free MSN Hotmail before had 2MB of storage capacity.
Microsoft also announced a premium Web service called MSN Hotmail Plus, for $19.95 per year, giving customers 2GB of online storage and the ability to send 20MB attachments.
All current Hotmail extra storage subscribers worldwide will be upgraded to MSN Hotmail Plus when it launches globally later this summer, Microsoft said. MSN Premium subscribers will also receive those added storage benefits later this year.
Customers of Hotmail Plus also will not see graphical advertisements -- they will be replaced by text advertisements -- and their accounts will never expire, Irving said. Users of the free Hotmail e-mail service must log in at least once every 30 days or their accounts expire.
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