Outlook.com arrives: Microsoft gets aggressive in new bid to dethrone Gmail

Microsoft is officially launching Outlook.com on Tuesday — taking its new consumer email service out of preview mode and starting to shift longtime Hotmail users to the updated Outlook.com interface. It’s part of a plan, announced last year, to retire Hotmail, Microsoft’s classic webmail service. Nope, the upgrade isn’t optional, but don’t worry, old-timer, you can still keep your hotmail.com email address.

An Outlook.com user fires up his personal hovercraft in a new television ad, part of an effort to revive Microsoft’s consumer email business.

The company is simultaneously spending millions on a new Outlook.com advertising campaign, featuring people using the new email service for everything from cooking to flying a homemade hovercraft.

But can Microsoft rev up enough attention to get back on track against Gmail? Google’s email service has been growing rapidly as Hotmail usage has been declining.

Microsoft is hoping to turn that around.

Outlook.com connects tightly with social networks, integrates with Microsoft’s SkyDrive storage service, and offers a set of tools to fight inbox clutter. The streamlined user interface is designed to bring Microsoft’s consumer email service into the modern world of tablets and smartphones.

The company says Outlook.com has quickly risen to 60 million users during its six-month preview, making it the fastest-growing email service on the market. More than 1/3 of those active users during the preview have been active Gmail users, according to the company’s statistics.

However, Google has just taken the crown from Microsoft as the king of webmail, at least by one measure.

Worldwide numbers provided to GeekWire by comScore Networks show Hotmail web usage declining by a larger amount than Outlook.com has grown. The result: An overall loss in market share for Microsoft’s webmail services in 2012 — falling from 317 million unique users for Hotmail in December 2011 to just under 305 million unique visitors in December 2012 for Outlook.com and Hotmail combined.

Meanwhile, Gmail rose from 252 million unique visitors in December 2011 to nearly 306 million in December 2012 — a 21 percent increase that put Google ahead of Microsoft’s combined share for Outlook.com and Hotmail for the same month.

Microsoft says its internal stats are a count of actual customers using web, desktop clients and smartphones, while comScore is extrapolating its numbers from web usage.

“We consider Outlook.com’s fast growth and positive momentum to be a clear indicator that we’re headed in the right direction to achieve our goal of providing the world’s best personal cloud email for a billion users,” a Microsoft representative says.

Bottom line, it’s a very competitive market.

This is the context for Microsoft’s Outlook.com launch, and also for the Redmond company’s increasingly aggressive (and at times misleading) “Scroogled” campaign targeting Gmail and Google’s practice of automatically analyzing the contents of email messages to serve ads. Although webmail services are largely free, they’re important to the companies as gateways to related services and advertising revenue.

Outlook.com’s features include tight integration with Facebook and Twitter. (Click for larger image.)

Microsoft is spending big on an advertising campaign showing people using the features of Outlook.com. (Hometown trivia: The music in the ad above is “Can’t Hold Us,” by Seattle’s own Macklemore & Ryan Lewis.)

In conjunction with the Outlook.com launch, Microsoft will also start shifting the hundreds of millions of Hotmail users to the new Outlook.com interface, a process that will take place in stages between now and this summer. Users won’t need to change their passwords or email addresses, but the upgrade to the new interface is not optional.

This change has been expected since July, when Microsoft unveiled Outlook.com and announced plans to retire Hotmail. It’s the end of an era for the famous (and at times infamous) Hotmail brand.

Hotmail pioneered web-based email prior to its acquisition by Microsoft in 1997. For years Hotmail was synonymous with spam, and even though Microsoft has made major strides on that front, the Hotmail brand continues to be hampered by that history in the minds of many users.

With the Outlook.com release, the company is aiming to trash that era for good.

[Note: Outlook.com is a sponsor of GeekWire events.]

  • Guest

    Still no two factor authentication as far as I can tell.

    Until they get serious about protecting against account hijacking I’m not touching this.

    Microsoft and Twitter are the two hold outs for two factor auth. And they’re the platforms with the most serious hijacking problems (just look at Burger King today).

    No two factor auth for a major identity platform is like selling a car with no seatbelts. Shocking and inexcusable.

    • http://www.timacheson.com/ Tim Acheson

      Outlook.com offers single-use codes, a much more convenient and more targeted solution than two factor auth. Gmail does not have this feature. Outlook.com also does allow you to enter your mobile phone number to verify major account changes and recover your account and data. You can also set extremely strong passwords on both Outlook.com and Gmail if that is a specific concern.

      Less than 1% of Gmail users have adopted two factor auth, and adoption is low even among the many users who have had their Google account hacked!

      http://mashable.com/2012/08/10/outlook-security/

  • N8

    I wonder when they are going to stop redirecting their latest brand if the month to live.com…..

  • http://www.timacheson.com/ Tim Acheson

    The graph compares YoY stats for December, presumably reflecting the usual bias in favour of Google, because if we compare other months in the same way Hotmail has the lead and some months Yahoo does.

    “Lies, damned lies and statistics.”

    • http://geekwire.com Todd Bishop

      No, that is just the most recent month of available stats from comScore. Gmail’s growth trend is actually very clear and consistent.

      • http://www.timacheson.com/ Tim Acheson

        A graph comparing more than one month would be more meaningful.

        The market share of the top three webmail services are very similar, there’s not much in it. If you want to present a trend of growth, let’s see a graph for that too. :)

        Let’s see the data.

        It’s a complex picture, e.g. Hotmail is ahead of Gmail based on Litmus Email Analytics analysis of over 20 million email opens via an email client (Jan 2013).

  • Guest

    I think I speak for everyone here when I say that I already use Gmail. Because I am very happy with my e-mail provider, I think I speak for everyone when I say that no one, anywhere, ever in the world should even consider Outlook.

    You’re welcome.

    • guest

      What you “think” != reality.

  • http://www.facebook.com/people/Mike-Christensen/676694755 Mike Christensen

    The fact you couldn’t setup email aliases (like support@yourcompany.com) was a deal breaker for me. I’m sticking with GMail.

    • visionsat

      I read somewhere that you can set up 5 aliases in a year, upto max. of 15 at any given time…