The battleground is e-mail, a service which, for many, virtually defines their online existence.
Some of the web's free e-mailers have been around for years, but 2004 promises to usher in a new era entirely.
The battle began when Google revealed its own service, Gmail, and the implications could hardly have been more far-reaching.
Conversation threads
Announced on the first of April, some thought Gmail was an April Fool's joke but it most certainly was not.
In fact it is a free service offering a full one gigabyte of storage, hundreds of times more than its rivals. It is enough to receive a quarter of a million e-mails and never to have to delete a message again.
| Our research shows that
100MB is more than enough storage for most of our customers, and that
actually what they really care about is safety, security and other
features James Bilefield, Yahoo |
But nothing comes for nothing. To pay for the service, Google intended to use targeted advertising based on keywords within e-mails.
Privacy activists are fuming about the thought of having our conversations permanently stored on Google's servers, and having them scanned, albeit by automated software programs.
Gmail is so controversial that legal moves were made in the US and Europe to stop it dead in its tracks.
A compromise has now been reached. Gmail will not be allowed to collect personal data from users' e-mails and give them to third parties or produce records using the data.
Rivals react
Its rivals are taking no chances. Yahoo, one of the web's most popular e-mail services, has revamped its own offering, increasing the free storage from six megabytes to 100.
| We do not have a search engine looking at
your e-mails and serving you adverts Alex Kovach, Lycos |
"Yahoo's been in the e-mail business since 1997 and our research shows that 100MB is more than enough storage for most of our customers, and that actually what they really care about is safety, security and other features, so that's what we focus on."
And it did not take long for Microsoft to react. Owners of Hotmail accounts will soon be able to enjoy 250MB of free storage, or 2GB for a fee.
Others are also determined not to be trumped by Gmail. Mac specialists Spymac matched the offer, and other, lower profile, sites have also joined the party, some giving away even more storage than Gmail, and without the controversial ad-scanning.
Some players though are taking a more measured approach, such as web portal giants Lycos.
They have enhanced their e-mail service and added more free storage, but to get very large amounts you have to pay.
"The reason why we think there's a segment of people in the market who'll be prepared to pay for our 1GB package is that we believe privacy and security is very important, we do not have a search engine looking at your e-mails and serving you adverts," said Alex Kovach of Lycos.
"It is entirely ad-free as a product. We also spend a lot of time on virus and spam protection. In addition, within our package, you have your own domain name."