The online photo sharing space is in for a dogfight between Yahoo!'s Flickr and Google-promoted Picasa.
Yahoo! fired the first salvo when Flickr revamped its look and feel, while offering each user one terabyte of free storage space.
It also launched a new Android app for phones and tablets in 10 languages.
In a statement, Yahoo! touted it as "a lifetime of photos all in one place". One terabyte of storage would mean room for 537,731 photos in full original quality, the company said.
Yahoo! chief executive officer Marissa Mayer described the new service at a New York press event as "heart-stoppingly beautiful".
Photos will be uploaded in full resolution, she said. "When you upload [and] share your photos, you don't lose any fidelity."
The new Flickr lets users save video clips up to three minutes long. The site now comes with a re-designed interface both in photo browsing and in search.
The new look does away with words and comes with large photographs bounded by black margin.
Indicating that the Yahoo! management was in a mood to revamp its eight-year-old acquisition, Mayer said: "Flickr was awesome once, and it languished. We are going to make it awesome again."
Interestingly, the updated app is very close to the iPhone app that Yahoo! launched in December in which it maintains "your photos' original quality. So every image you take, edit, share, or view on your phone or tablet looks spectacular.”
Many industry watchers feel the move to give away one terabyte of storage space to each Flickr user would do to photo-sharing space what Google did to email by offering 10GB