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"Microsoft made its first move Wednesday to fight off competition from free E-mail rivals such as Google and Yahoo by beefing up Hotmail's anti-virus protection.

Hotmail previously scanned only for viruses and other malicious code in incoming messages. Now, the McAfee-based anti-virus scanner scans both inbound and outbound mail and deletes any malware it finds.

Later this summer, Hotmail will implement its already-announced plans to increase storage space for both its free and paying users. The former will see their storage allowance jump from 2 Mbytes to 250 Mbytes; premium subscribers, who pay $19.95 annually, will receive 2 Gbytes of space.

Gmail, Google's venture in free Web-based E-mail, is still in testing, but when it goes live, plans to offer 1 Gbyte of storage space. Yahoo, also in the storage space race, provides 100 Mbytes to users of its free service and 2 Gbytes to those who pay $19.99 annually for Yahoo Mail Plus."

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Source: InfoWeek