Analyst: Microsoft Reboots Hotmail to Build Consumer Destination
Microsoft's rebranding of Hotmail as Outlook.com is a move by the company to hold its first-place position in free email while pushing the domain as more of a consumer destination, an analyst said.
Microsoft unveiled Outlook.com, a massive overhaul of Hotmail that features a visual redesign, integration with the SkyDrive cloud-based storage service and free online Office apps, and ties with several social networking sites, from Facebook and Twitter to LinkedIn.
While Microsoft will run Hotmail and Outlook.com side-by-side for an indefinite period, eventually the company will ditch the former, the company said.
Wes Miller, an analyst with Directions on Microsoft, a Kirkland, Wash.-based research firm that only tracks Microsoft's moves, said the shift to Outlook.com illustrates Microsoft's recent focus on consumers. "They're trying to harmonize the value of Hotmail and the Metro design language with the services they already provide," said Miller. "They want to make Hotmail become more of a destination, a place where users spend more time."
Outlook.com, like Hotmail and other free email services such as Google's Gmail, runs advertisements within its browser-based interface. The more time users spend on Outlook.com, the more ads Microsoft can show them.
But Microsoft isn't trying to make Outlook.com "stickier" -- a term that describes websites that not only attract users, but keep them there -- using its social media ties.
"I'm not so sure that [social networking] will be the thing that drives people to it, or to use it," said Miller of Outlook.com. "Instead, it will more about how [the service] helps you get things done."
Miller pointed to the integration with SkyDrive and the Office Web Apps -- the in-the-cloud versions of Excel, PowerPoint, OneNote and Word -- as key to Microsoft's strategy.
Outlook.com provides each user with a free SkyDrive allotment of 7GB, and will open Excel, PowerPoint and Word documents with the online apps. SkyDrive is particularly critical to Outlook.com, as file attachments, including those sent by others, are deposited in the cloud, allowing users to send and receive very large files that might choke an email server or be rejected because of size limitations.
Outlook.com's ties with Office Web Apps lets users open Excel, PowerPoint and Word documents even if they don't have a copy of Office handy. (Image: Microsoft.)