The days are numbered for Hotmail as Microsoft seeks to replace it with a new email service that will be integrated with its Outlook mail client.
Microsoft Corporation(NASDAQ:MSFT) had bought the web-based e-mail service provider from Indian founder Sabeer Bhatia in 1998 and it gained immense popularity, with its Instant Messenger service which was integrated into the mail.
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However the arrival of Google's Gmail in 2004, offering large amounts of free storage and other innovative features have been steadily eating into Hotmail's market share over the years, though it still remains the world's most popular web-based e-mail service.
On Tuesday Microsoft showcased a preview of the new service that is expected to take on Gmail. The software company's Outlook is the most popular corporate email client and Microsoft obviously wants to cash in on it.
“E-mail is one of the only areas in technology that’s gone eight years without a significant change -- the last big move was the release of Gmail -- and for us it’s maybe been even longer than that since our last big change,” Brian Hall, a senior executive in Microsoft's Windows Group, told Bloomberg in an interview.
“None of the social networks existed then, and the types of e-mail we get have changed.”
Google has integrated Gmail with its social network Google Plus, making it easier for users of the service to access both at the same time.
ComScore data showed that though Hotmail still led with 324.2 million visitors in June compared to Gmail's 277.6 million visitors, it has actually lost ground, traffic to its site declining 4 percent in the year through June, compared to a 17 percent rise for Gmail.
Microsoft's official twitter account said that i million people had already signed for the new service since its launch on Tuesday.
Shares of MSFT ended 0.57% lower at $29.47.