Microsoft is increasing the storage limit for its Web-based e-mail service, surpassing competitor Google's limit but far short of Yahoo's unlimited storage.

The limit for a free Windows Live Hotmail account will increase from 2GB to 5GB. The change will be rolled out to users over the next few weeks along with a series of other upgrades, wrote Ellie Powers-Boyle, a Microsoft program manager, on a company blog.

Google offers around 2.8GB of storage space for a free account. Last week, Google began selling storage space that can be used for either its Gmail or Picasa photo sharing services for US$20 a year for another 6GB as well as more expensive plans.

Under the new changes, Microsoft will let users store 10GB of e-mail data for a $14.99 annual subscription. Those subscribers will also get a new feature: the ability to forward e-mail from their Hotmail account to a Gmail or other e-mail account.

Unfortunately, users of the free service will only be able to forward e-mail from one Hotmail account to another Hotmail account, essentially blocking them from a quick migration to another free e-mail service.

Another new Hotmail option is the ability to shut off the "Today" feature, which shows top news and features stories on Microsoft's MSN portal. It appears after a user logs into their Hotmail account.

Microsoft is also changing some of Hotmail's security features. One new feature is a link, "Report phishing" that alerts Microsoft to a possible scam website linked to an e-mail.

Powers-Boyle also wrote that Microsoft is trying to make Hotmail run faster. The company will also increase the amount of time that messages are stored in the junk and deleted items folders before being automatically flushed, although no specific time period was given.

Other improvements include: Better performance for Hebrew and Arabic writers, a feature that stops the duplication of contact information and the ability to set an automated response.