Microsoft Corp unveiled a revamped, Facebook-friendly version of its
free, online email service on Tuesday in an attempt to reverse market
share losses to Google Inc’s fast-growing Gmail.

The world’s largest
software company is renaming its Hotmail service Outlook, giving it a
sharp new look, social network links and new features for handling the
tide of junk and mass mail that swamps many users.

Hotmail was
still the world’s largest online mail service as of June, according to
the latest comScore figures available, with 324 million users, or about
36 percent of the global market.

But it is losing customers to
Google’s Gmail, the fastest-growing rival, which now has about 31
percent of the market. Yahoo Mail is static with about 32 percent.

In a bid to recapture growth,
Microsoft is renaming the service Outlook, a name familiar to most
corporate workers who use Microsoft’s Office email application, and
sprucing up the whole experience. Hotmail users will be prompted to
switch over to the new service over the next few months.

Hotmail, launched in 1996, was one of the first online email services, but it has not been updated by Microsoft for eight years.

lot has changed in the last eight years, and we think it’s time for a
fresh look at email,” Chris Jones, Microsoft’s corporate vice president
of Windows Live, said in a blog post.

The new look is clean and
uncluttered, featuring lots of white space, reminiscent of Google’s
recent makeover of Gmail. Relatively unobtrusive advertisements appear
in a column to the right of the screen when looking at folders. They do
not appear when a message is open.

Users can link up with their
Facebook, Twitter, LinkedIn and Google+ accounts, to see the latest
updates from friends and contacts. Online chat is available via

Newsletters, offers, daily deals and social updates make
up over 80 percent of a typical inbox, according to Microsoft’s own
research. To help combat that overflow, the new service automatically
detects mass messages and puts them in separate folders. Users can
customize the process to sort mail any way they want to.

The new
mail service also allows easy use of Microsoft’s Internet-based
products, such as SkyDrive for storing documents, Office Web Apps for
working away from a PC and will eventually have Skype video chat built

“This is about the battle of where people will make their
communication home,” said Al Hilwa, an analyst at tech research firm
IDC. “The big online players are connecting their online assets together
and hoping to provide convenience and functionality of a one-stop-shop
of cloud services.”

The success of Microsoft’s new service will
depend on whether it can develop it quickly enough “to keep up with a
brutally fast Google and a potentially re-invigorated Yahoo,” said

Users can access the service at Microsoft
said the service is currently a “preview,” meaning more features will
likely be added before the final version is fully launched.

Microsoft shares closed down 17 cents at $29.47 on Nasdaq.

Copyright Thomson Reuters 2012