Microsoft reboots Hotmail to build consumer destination, says analyst

Integration with SkyDrive, Office Web Apps crucial to strategy

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Nevertheless, the reboot couldn't have come at a better time: comScore said Hotmail's numbers had dropped 4% in the past year, while Yahoo Mail and Gmail grew 2% and 17%, respectively.

"Most consumers are much more familiar with 'Outlook' as a Microsoft brand," argued Miller, who declined to speculate on Microsoft's motives for abandoning Hotmail. "They sometimes put time into branding, but other times they ignore it, so it's hard to gauge what's behind the name change."

Microsoft could have made the design and integration changes seen in to Hotmail, and kept the older nameplate and domain, Miller acknowledged. But it didn't.

"We're seeing a renewed interest from Microsoft in the consumer side, which has been stagnant for a long time," Miller said. "They have lots of cleaning up to do, but they're starting to realize that they have a diamond in the rough [in Hotmail] and that they should fix it."

Although uses some of the same tools -- notably SkyDrive -- as the new Office 2013 suite and the Office 365 subscription plans, Miller saw the new service, like its predecessor, as getting little traction in any but the very smallest businesses.

The Office 365 plans slated to debut later this year or early in 2013, for example, all come with the Outlook email client -- not to be confused with -- as the primary locale for working with messages and other shared content.

Microsoft did not establish a timetable to retire Hotmail, although it confirmed that at some point those with addresses ending in will be forced to use the new interface.

Miller predicted what he thought was a fast move. "Hotmail will continue for time X, whatever X is, but I give it two more years," he said. Within 18 to 24 months, Microsoft will again have a single free online email service.

Users with current Microsoft-provided email addresses and accounts,, and will automatically be shown the new interface, but can switch back to the traditional look-and-feel if they're dissatisfied.

New email addresses ending in are also available, and can be registered at

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is

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Copyright © 2012 IDG Communications, Inc.

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