This actually happened to me. I have an old Hotmail account I rarely used and hadn't checked in 2-4 months. When I signed on last week all of my emails had been deleted. I was pissed but assumed it was some sort of policy in place.
Microsoft's online services division loses $100M-$200M each quarter.
Google retains the data indefinitely because it's in their best interests not because of their dedication to the user. Why else would they retain even what the user deletes?
>> we have a policy of deleting emails after 270 days
http://www.reddit.com/r/IAmA/comments/ej32l/we_are_the_hotma... (do a search for "270" on the page to find the quote)
Although I have no idea when they changed it to 270 - it can't have been that long ago.