In April 2004, Google?the world's leading search engine?sent shock waves through the popular press when it announced Gmail, a free email service boasting one gigabyte in free storage. At the time, the two market leaders MSN Hotmail and Yahoo! had been providing web-based email services for over seven years and were offering two megabyte and four megabyte respectively of free storage. The new service had prompted praise and criticism?the latter arising from Google's plans to scan emails to offer targeted advertising alongside each message. The case provides an opportunity to discuss competitive interactions in a highly complex environment.