Microsoft is dialing down its free storage limit from 25GB for SkyDrive to 7GB (there’s a limited extension back to 25GB). Box and Sugar Sync were already offering 5GB of free storage.

Google’s entry in the cloud storage market has sent waves across the industry, as competitors are now fine-tuning their services.

The space you earn is permanent and can be used for the life of your account, but it’s only for the Camera Uploads folder – if you move photos or files from your other Dropbox folders to the Camera Uploads folder, you will not earn free space. Here’s the catch with the storage of these photos: your first auto upload will secure 500MB of free Dropbox storage, and as you fill the space up, it will be bumped up to 3GB. As part of an earlier feature introduction, you can also share individual photos with a link, just like any other files in your Dropbox. Once your photos are uploaded, Dropbox has a new online Photos page, where you can see large thumbnails grouped by month and hover over them to find the date, or click to see a full-resolution version.

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