Microsoft on Monday launched a series of updates to its Windows Live Hotmail service, most notably, free accounts will now get the new storage size of 5GB, while paying customers of Hotmail Plus or MSN Premium will get 10GB.

The move follows Google's recent announcement that it will begin offering paid storage that can be used across several of its products, including the email service Gmail and photo site Picasa. Gmail users currently get nearly 3GB of free storage, while both Yahoo and AOL already offer unlimited free storage for their email services.

The update includes improved contact management, auto-away messages, account forwarding, accepting meeting requests sent from Outlook, among other things. Also, responding to users complaints, Microsoft is bringing back the option to see your inbox immediately upon login instead of the 'Today' page.

The unexpected storage bump will surely be welcomed by Hotmail users. Personally, I didn't dump my Hotmail account years ago due to its storage limits only, but because of its lousy spam filters too. Hopefully, Microsoft has been working hard in that area as well. The company said the new features will begin to roll out gradually to all customers over the next few weeks in order to minimize any potential problems.