In celebration of its 10-year anniversary, Yahoo! Mail has announced that starting May 2007 they will be removing all caps on storage and allowing all users (free and paid) of its service unlimited space. Yahoo! Mail is currently third in terms of free webmail space at 1 GB, MSN Hotmail is second at 2 GB and Google’s Gmail is first with 2.8 GB.

Yahoo! Mail first launched in 1997 with 4 MB of storage, and upgraded to 100 MB in 2004. Soon after, they raised the limit to 1 GB in 2005. Premium (paid) subscribers are currently allowed 2 GB of storage.

I think this is a fantastic move on Yahoo’s part. While it probably won’t be enough to convince me to switch from Gmail, I applaud Yahoo for recognizing that this was clearly where the industry was going and taking the first step. Gmail and Hotmail would be wise to follow suit, particularly Gmail if they want to start to chip away at Yahoo! Mail’s 250+ million users.