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Who benefits from unlimited webmail storage?

Yahoo Mail, Gmail & Hotmail up the ante

Webmail providers are motivated to offer vast email storage not only to keep up with competitors, but also because the more data users keeps in their inboxes, the less likely they will be to abandon their accounts, Takahashi said. "It's a way to increase the stickiness of their service," he said. This in turn translates into more ad revenue for them, since webmail services are advertising vehicles, he said. At the same time, the cost of storage is plummeting, so the investment required to provide larger inboxes is a fraction of what it was five years ago.

Laszlo recommends that providers consider increasing the size of messages that can be sent and received, considering that people are sending large video and photo files via email more frequently each day. Currently, most webmail providers cap message sizes at between 10MB and 60MB. However, as pledges of unlimited storage become more common, Laszlo forecasts a lull in webmail improvements.

"The webmail industry goes through cycles where there's a large amount of innovation and things then quiet down for a while, before there's another burst of innovation. We're kind of at the tail end of the innovation spurred by Gmail," said Laszlo.


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