Hotmail upgrade arrives two days late

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By Martyn Williams and Matt Berger

(IDG) -- Hotmail users were greeted Thursday with a new look to the free Web-based e-mail service as Microsoft rolled out a series of upgrades, two days behind schedule.

New features include an MSN Explorer-like interface as well as further signs of integration with Microsoft's much-ballyhooed .Net initiative.

The upgrade was originally scheduled to take place on Tuesday, but Microsoft delayed it, saying to expect the launch on Wednesday morning. However, at the end of the day, the upgrade had not taken place. Reached late Wednesday, a company spokesperson said the reason for the unscheduled delay had not yet been identified.

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MSN Mail Appears

When the upgrade went live on Thursday, users could immediately see Microsoft's MSN Internet division had altered the look of Hotmail for the first time in three years. The changes bring the popular service up to date with newer MSN applications, including MSN Explorer, the Web browser included with MSN Internet Service.

"This is a pretty significant change for Hotmail," says Rebecca Thompson, a product manager at MSN. "Consumers will definitely notice the difference."

New to Hotmail is a beefed up junk-mail filter to fight spam, quick links to frequently used contacts, an e-mail template similar to that of Outlook Express, and the addition of Swedish and Dutch to its list of 12 languages supported on the service.

The most significant addition to Hotmail is the integration of Microsoft's Web services building blocks, code-named Hailstorm, which form the basis for its .Net initiative. Those early Web services include the MSN Calendar, MSN Messenger instant messaging service, and authentication services through Passport.

Windows Full of .Net

The company will also include Hailstorm services in the next version of its Windows operating system, Windows XP, which is due for release on Oct. 25.

"One of the things that users can expect is that there will be more and more integration between Microsoft's services...especially as those services take more advantage of .Net," says Chris Le Tocq, principal analyst with Guernsey Research.

Although Hotmail has previously made use of Passport to allow users to sign on to the service, the new Hotmail will incorporate the remainder of those Hailstorm services. Links to MSN Messenger and MSN Calendar are built into the new user interface, and instant messenger contacts, or buddy lists, show up on the Hotmail home page.

"Microsoft is taking steps to include its Hailstorm services into all of its products," Le Tocq says. "Hotmail can be expected to be a key beneficiary of that integration."

From Free to Fee?

Hotmail users currently don't pay to use the service, something Le Tocq says will gradually change as the company attempts to add value with additional services.

For example, similar to Yahoo Mail, Microsoft may start charging users on a subscription basis to increase the amount of storage each user gets with an e-mail account. Currently, members get 2MB of storage for free, and could potentially pay for an increase, Le Tocq says.

"As far as adding subscription services, MSN in general is looking at the business model," Thompson says. "We don't have anything in this upgrade, but it is something that we're looking forward to."