Google has confirmed that it will be launching an online storage service ‘Drive’, later this week

Drive is a free storage system for videos, photos, documents, PDFs – and will allow users to ‘drag and drop’ their files direct from PCs or Macs instead of storing them on their own hard drives

The system works with phone apps on both Androids and devices such as iPhone or iPad.

It will also work with Google’s current Documents, allowing several users to work together on a photo album, video or spreadsheet at once.

The search giant confirmed today, the existence of its long-rumoured online storage service saying ‘you can get started with 5GB of storage for free—that’s enough to store the high-res photos of your trip to the Mt. Everest, scanned copies of your grandparents’ love letters or a career’s worth of business proposals, and still have space for the novel you’re working on,’ says Google.

‘You can choose to upgrade to 25GB for $2.49/month, 100GB for $4.99/month or even 1TB for $49.99/month.

‘When you upgrade to a paid account, your Gmail account storage will also expand to 25GB.’ Etna’s fingers of fire: Europe’s most active volcano sends molten lava streaming menacingly down its mountainside

Google search will also be a major part of the new service – including the ability to search for text in scanned-in documents.

‘Drive can even recognize text in scanned documents using Optical Character Recognition (OCR) technology. Let’s say you upload a scanned image of an old newspaper clipping. You can search for a word from the text of the actual article,’ says Google. ‘We also use image recognition so that if you drag and drop photos from your Grand Canyon trip into Drive, you can later search for [grand canyon] and photos of its gorges should pop up.’

Google has been widely rumoured to be releasing such a service for weeks – and rivals have already begun to respond to the ‘threat’ posed by the search giant.

Online storage company Dropbox has made it easier to share content such as videos via its 50-million-user ‘cloud’ storage service, in advance of the launch of a rival from web giant Google.

Dropbox has altered its service so users can share simply by sending an emailed link rather than sharing folders.

Microsoft’s SkyDrive service has also been upgraded in advanced of Google’s launch, with users able to drag files into SkyDrive from Windows 7 machines.

‘Our gallery pages give your photos, videos, and even docs the gorgeous, full-browser view they deserve,’ said Dropbox via a blog post this week.

‘This means that people who follow your link can see pictures, look at presentations, and watch home videos without having to download and open them separately.’

Online storage start-up Dropbox has some high-profile support – U2’s Bono and The Edge have personally invested in the company.

Singer and activist Bono has been a high-level investor in tech companies through the private equity firm Elevation Partners, of which he is a co-founder and Managing Director.

The Dropbox investment is the first time Bono has been publicly named as an individual investor in a company.

‘Dropbox is excited to welcome Bono & The Edge as investors. Thanks for the support and look forward to great things,’ said the company in a Tweet this week.

The ‘cloud’ storage start-up was recently valued at $4 billion.

Services such as Dropbox have become hugely popular as people increasingly use computers ‘on the go’ – offering simple ‘cloud’ storage where users can access their files from anywhere via apps or web browsers.

Google’s service is expected to offer 5GB of storage, and appear as an icon on Windows and Mac desktops into which users simply ‘drop’ files.

Google has spoken about launching a ‘G Drive’ service in the past, but the company has been tight-lipped on the subject recently.

Videos, documents and music would be stored remotely in Google’s data centres, instead of in individual hard drives.

Google Documents already lets users store 1Gb of files online.

Services such as Dropbox have become hugely popular as people increasingly use computers ‘on the go’ – offering simple ‘cloud’ storage where users can access their files from anywhere via apps or web browsers.

Dropbox’s CEO Drew Houston reportedly turned down a ‘nine figure’ offer from Apple for the company.

Apple now offers a similar service, iCloud, which stores music, books, films and apps online, and is free to all users of iOS 5, the latest version of its mobile operating service.

Microsoft also offers similar – but paid-for – services such as Office365 and its free SkyDrive, previously aimed at phone users.

Google’s service, though, is likely to be a simple, ‘one stop shop’ file storage system like Dropbox’s, which allows users to store anything, anywhere.