Google takes on Hotmail with Gmail

Google is launching a free email service, offering 1GB of storage for each account, in what is seen as a major challenge to leading web email providers such as Yahoo and Microsoft-owned Hotmail.

Gmail.com will be rolled out this month in what the company calls an experimental service.

Each account will feature Google's search engine technology to make finding old emails easier.

"If a Google user has a problem with email, so do we," said Sergey Brin, Google co-founder and president of technology, in a statement.

"And while developing Gmail was a bit more complicated than we anticipated, we're pleased to be able to offer it to the user who asked for it."

Google's system was designed by one of its engineers as a "20 per cent" project - the scheme which gives Google employees one day a week in which to work on projects that interest them, the company said.

In contrast to the 1GB of storage offered by Gmail, Hotmail offers a maximum inbox size of 100MB for £39.99 a year.

Further information about Gmail can be found here.

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