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Microsoft's New Hotmail Is No Knockout


Hotmail, the world's leading Web e-mail provider, has coasted for years with barely a feature update. Microsoft is finally planning to issue a major release later this summer. On May 17, the company provided reporters with a preview. Modernized Hotmail will include such features as better e-mail filtering, enhanced media viewing, and document-editing features.

Microsoft is bringing Hotmail up to speed with the competition—namely, Google's Gmail—and offering increased storage, spam detection, conversation threading (though not by default), integrated chat, and a better mobile experience on platforms such as BlackBerry and Nokia. Although Hotmail is the leading e-mail service worldwide, it's No. 2 in the U.S., behind Yahoo Mail, according to market researcher ComScore. (Gmail is third.)

The revised Hotmail has no notable social media features, unless you count photo-sharing. That's a pretty strange omission. Yahoo Mail, which acquired Xoopit and has integrated a social "news feed" into its in-box, is far ahead in this department.Google's recent foray into innovation around e-mail was Buzz, which following privacy issues at launch, still hasn't made itself that useful.Meanwhile, Xobni provides great context and social information around Outlook, while up-and-comer Etacts does similar things around Gmail. (See our recent story on Etacts' first round of funding.)

Document Editing and Viewing

The next big thing in e-mail is to make the in-box an application platform on which users can interact dynamically with messages without opening a new window.The new Hotmail hints at this: Through an "Active View" feature, a U.S.Postal Service tracking code turns into a software "widget" with delivery information displayed in the body of a message.Hotmail will also offer support for viewing and doing basic editing of Word, Excel, and PowerPoint documents.(Oddly, this functionality does not overlap with the recent launch of Microsoft's online document-editing site Docs.com in partnership with Facebook, which came from a separate team.)

Here are some of Hotmail's more interesting and unique feature additions:

• Rich slide show tools for photos attached to messages and links to albums on Flickr and SmugMug

• Embedded videos from YouTube, Hulu, and Justin.tv

• Bing sidebar to easily add photos, maps, and info such as movie times from the Web. (This seems like it could be useful but is also totally weird; the demo example was to include clip art from the Web in an e-mail … is this really necessary?)

• "Sweep" tool blocks newsletters by deleting and blocking all messages from a specified sender

• Click on any name to view all messages from a sender (one of my most-wanted Gmail tweaks)

• Exchange ActiveSync to push e-mail on mobile

Photos Deleted in Three Months

The implementation that seems a bit awkward to me is photo-sharing. While nice slide show tools and increased attachment limits sound nice, I don't like the way this works in the new Hotmail and I wouldn't use it. The limit for total size of photos in a single message is now an astonishing 10 gigabytes. How can Microsoft be so generous? It doesn't actually transfer the pictures. Rather, it hosts them in the cloud on SkyDrive.

Here's how it works: Recipients click through on the URL for photos (even if they're not on Hotmail). They must have Silverlight installed on their computers to view photos online; if not, they can download attachments directly. The only people who get access to the picture URL are the recipients of the e-mail. Invited users can tag people in the photos and add their own to the album if they have a Windows Live ID. Then SkyDrive deletes the album three months after you post it. (You're allowed to extend this period indefinitely if you choose.)

Microsoft says this makes sense because many users e-mail photographs that are viewed only shortly after they were sent. In today's Hotmail, attachments account for 95 percent of storage, with 55 percent of them photos.

Personally, I'd rather keep that nearly unlimited storage in my in-box, with attachments persisting as long as I want them to. If I want to put pictures in the cloud, I'll put them on Facebook or Flickr, where they can live within a connected context. Maybe that's just me. If Hotmail were to remove the default three-month expiration, I'd likely be happier.

Update: A Microsoft spokesperson responded to this story via e-mail, noting that the new Windows Live Messenger, which wasn't prominently featured at the event, will include the ability to connect with and update social networks including Facebook, MySpace, and Twitter from the Hotmail home page.

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Liz Gannes covers the web for GigaOM.

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