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Microsoft is officially launching on Tuesday — taking its new consumer email service out of preview mode and starting to shift longtime Hotmail users to the updated 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 email address.

An 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 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. 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 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 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 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 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’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 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.’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 (Hometown trivia: The music in the ad above is “Can’t Hold Us,” by Seattle’s own Macklemore & Ryan Lewis.)

In conjunction with the launch, Microsoft will also start shifting the hundreds of millions of Hotmail users to the new 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 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 release, the company is aiming to trash that era for good.

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