hopefully microsoft will have some "real" competition soon ....
Details are available in Leslie Walker's article in the Washington Post.
Looks like you need a registration unless you reach the site from google news! so here is the actual text of that article ....
The rivalry between Yahoo and Google escalated last week as the two search engines rolled out improvements to Web-mail and discussion-group services designed to lure users from one service to the other.
Yahoo's big move was to slash prices on its paid Web e-mail service (mail.yahoo.com) by as much as 33 percent: A plan with 25 megabytes of message storage now costs $19 a year, down from $29, and one with 100 megabytes goes for $49 instead of $59. Later this summer, Yahoo says it will upgrade its free Web-mail service from 4 to 100 megabytes of storage, while giving "virtually unlimited" storage to customers who have already paid for the portal's extra-cost mail services.
Yahoo's shift came in response to Google's plans for Gmail, a free Web-mail service that will provide users 1 gigabyte of storage in return for letting Google show targeted ads alongside messages. Gmail (gmail.google.com) is planned for release in late summer or fall.
In a meeting with financial analysts Thursday, Yahoo also disclosed that it will soon provide a downloadable "desk bar" program that will let users run Web searches and access a bunch of other Yahoo services outside of their Web browser. The portal also said it's about to release new search features to help people find local businesses.
Google, meanwhile, revamped its Google Groups service to challenge Yahoo Groups (groups.yahoo.com). Previously, Google provided access only to Usenet discussion groups, but now it also lets people create and manage public or private mailing lists, as Yahoo Groups does. Yahoo's service offers more features, including space for storing photos, but Google Groups 2 (still in a test state at groups-beta.google.com) offers one unique option -- users can highlight favorite discussion topics with a star so they can easily find them on their next visit to the site.
Google revised yet another service last Monday, when it redesigned Blogger.com, the Web-log tool it bought last year. The new version aims to ease newcomers into the art of "blogs," or online journals, with a set of design templates and a personal-profile system that links new authors to other bloggers who share their interests.
On the same day as the Blogger relaunch, Google itself started its own "Google Blog" (www.google.com/googleblog). But its authors on the search site's executive team promptly raised the ire of veteran bloggers by posting items anonymously and revising previously published material. "You just don't do that with a blog, according to half the Google Staff and all the Blogger folk," the blog confessed in a posting Friday. But the Google team noted its blog is an experiment and said it will continue to offer a mix of anonymous and signed postings.