The one thing I can see Google is striving to beat Yahoo! at is the mail services and client options. They have a lot of ground to cover, over at the Mountain View Headquarters, and they don't waste one moment of their time on trivial things. It looks like their main point of concern is user happiness and everything they can do achieve it. On the receiving side I say "bring it!"
I'm not sure whether the built-in IM of Yahoo! is
better than that of Google and I'm also not sure if a comparison can actually be made per se, but they are trying to take it to a competitive level, the googlers: they have added not one but two new generations of emoticons, instead of the old and dull ones and the option of group chatting.
Today is color day over in your inbox, as I'm sure everybody will flock to their PCs in order to change the labels and to enrich them with various nuances. It's a big step forward to my personal user happiness, it's something I've been hoping for a long time now, and what's to come next is yet more thrilling, or thrilling to the same extent: folder-ish functionality.
The new labels are easily interchangeable, all you have to do is click on the new button added at the right of the label and choose the color of your dreams or nightmares, depending on who is the mail from. They make the scanning of your inbox for more important mail a lot easier, and dare I say a more pleasant experience. There's also an addition of a button useful for removing a label from a conversation, while reading it, instead of having to go out to the inbox, check its box and choose the respective option.
The new feature only works with the newest version of GMail that is currently available only for Internet Explorer and Firefox 2. There's been no announcement about support for other browsers.