Things just got a lot hotter in the hyper-competitive world of online email providers.

In response to Google's announcement that their soon-to-be-launched "Gmail" service will offer users 1 gigabyte of email storage, Yahoo! announced an upgrade of their free email service to allow users 100MB of free email storage along with other enhancements.

Microsoft's Hotmail will surely also announce a free upgrade in email storage space.

On the surface it might just appear like a simple case of one-upmanship, but it actually represents major forces digging in online and preparing to do battle.

It appears Yahoo! simply wanted to take the issue of email storage space off the table as a consideration for users as to which email service to choose.

Google enjoyed considerable media and public attention over the past few weeks with the media marveling at how Google intended to give hundreds of megabytes more space to its users than Yahoo! or Hotmail.

With this move, Yahoo! made storage a "non-issue," but the real war has only just begun.

Email ranks as the number one most popular online activity according to virtually any survey you care to read.

When people go online, they spend the single biggest chunk of their time sending, receiving, and reading email.

Online email providers understand that eyeballs on a page looking at advertising and responding to offers is what makes them money.

By increasing loyalty among email users in order to repeatedly draw them back to the same website (often several times a day), email service providers like Yahoo!, Hotmail and Google can keep people looking at revenue generating ads.

Despite the best efforts of government regulators, private organizations, software filters, ISP's and others, over half of all email sent online rates as unsolicited commercial email (SPAM).

Besides storage space, Google, Yahoo! and Hotmail will start claiming that their spam filters rate better than the rest.

These online powerhouses hope to attract users with the promise of cutting down and even eliminating the avalanche of get-rich-quick, pornography, and ink-jet cartridge offers (among others) that bombard virtually anyone with an email account more than 15 minutes old.

This will, however, lead to another problem that many of them won't talk about, which involves filtering legitimate email as spam.

Unfortunately, the sword cuts both ways on this issue.

So where does it all end? Never! Hotmail will enter the fray with expanded storage capacity as well as the promise of less spam and a more "friendly" interface to make your email life even easier.

Yahoo! and Hotmail will most likely copy Google and start serving context sensitive advertising based on the content of each email message as it get viewed.

Privacy advocates will weigh in to claim that all of the filtering and serving of ads based on an email message's content violates our rights to privacy and heralds the arrival of "Big Brother."

But all this jockeying for position and enticing users from one email service to another actually represents a great boon for the average Internet user.

It will force three of the Web's biggest players to wake up and improve their services after 2 or 3 years of "business as usual" and we can all expect a few valuable innovations to result.