Microsoft has watched Google slowly attack its core business
-- and even its ancillary businesses -- for more than a decade. Google has taken aim at Office, Windows, Windows Phone and Hotmail, among other products.
Now, Microsoft is taking the gloves off on the e-mail front. But is it too late?
The Redmond, Wash., tech giant revamped Hotmail six months ago, renaming it Outlook.com and rolling it out in preview mode. Since then, Microsoft has attracted 60 million users to the service. It's likely that the greater majority of those users migrated from Hotmail. But Microsoft isn't merely looking to keep the users it has.
Microsoft is looking to challenge Google and others in this critical playing field, and is launching a multimillion-dollar ad campaign to let Americans know about its new approach to e-mail. Expect to see Outlook.com commercials on prime-time television, hear ads on radio, and run into banners online, on billboards and on buses during the three-month campaign.
Millions of Users Behind
"Early adopters have told us what they liked, what they'd like to see next, and what we needed to do to make more people switch. And we've used that to add new features and fine-tune the services to scale," wrote David Law, director of product management for Outlook.com, in a blog post. "Now that Outlook.com is coming out of preview, we'll be kicking off a huge push across a number of countries around the world to drive even greater awareness and adoption of Outlook.com."
Microsoft is far behind Gmail. At Google I/O 2012 last June, Google said it had 425 million users. Hotmail only has 300 million users, in spite of launching nearly a decade before Gmail. Microsoft actually acquired Hotmail for $400 million in 1998, two years after it was launched.
Will the new Outlook.com help Microsoft get its Web mail mojo back -- and win Gmail defectors? We caught up with Greg Sterling, principal analyst at Sterling Market Intelligence, to get his answer to that question.
"Much of Outlook's growth will come from converting Hotmail users, rather than Gmail users," Sterling told us. "It's very tough to get people to switch e-mail addresses because often they have a great deal of equity invested in them and have had them for years. Microsoft may be able to capture some AOL and even Yahoo users. However, I think not that many Gmail users will defect."
The SkyDrive Connection
Outlook.com includes free Office Web apps -- Word, PowerPoint, Excel and OneNote -- to let consumers view and edit attachments without leaving the inbox. Outlook.com also comes with SkyDrive, so if users are sending photos, documents, or other large files, they can now put them on SkyDrive and stop worrying about attachment limits.
"Outlook.com was also designed to make it easy to send hundreds of photos, videos and just about everything people want in a single message -- all powered by SkyDrive," Law said. "Nearly half of the people using Outlook.com have already used SkyDrive to share more than half a billion photos and Office documents."