Good news for digital photographers looking for a little extra free storage space for their images. Microsoft has just announced that it is giving computer users up to 500 megabytes of online storage for their documents, music, photos and video.

The bad news is, is that for now the scheme is only available to a selected 5000 users while the offer remains in beta.

Microsoft made an early, "beta" version of the web-based file storage system available to 5000 people Tuesday night in its latest effort to bulk up its online offerings and fend off challenges from Google.

But wait, according to sources, the beta will be widely available later this summer.

Rumoured to be called "Windows Live Folders", the service is designed to offer users an alternative to carrying around USB thumb drives and allow people to quickly and easily transfer files to and from machines, be it work or home.

However critics are already claiming that the storage capacity is minute compared to other offerings from company's such as AOL who currently offer 5Gb of storage through its Xdrive offering.

However when it comes to email, its unlikely to compete with Yahoo, Google and Microsoft itself offering GB's worth of space for correspondents, and of course attachments.