Microsoft Corporation
(
MSFT
) announced that it has launched a new e-mail service called
Outlook.com. The new service will replace the existing Hotmail
service.
Microsoft has been struggling with its Hotmail brand and e-mail
related software service with its Microsoft Outlook brand. This was
because Microsoft faced intense challenges from
Google
's (
GOOG
) Gmail and
Yahoo
's (
YHOO
) Yahoo Mail.
Hotmail, founded by Sabeer Bhatia and Jack Smith, was launched
in July 1996. Microsoft purchased it in 1997 for $400 million and
renamed it MSN Hotmail.
While Gmail users totaled 425 million worldwide and Yahoo 310
million. Hotmail has picked up 369 million users since its
inception. Over time, Hotmail has lost share to both Gmail and
Yahoo mail.
To regain its lost market share, Microsoft is trying to increase
the relevance of its email service. Outlook.com is therefore
cloud-based, with user information stored on Microsoft servers and
enabling users to check their mails, contact lists and other data
across multiple devices. While this is not original, it does bring
Outlook on par with the others.
It is believed that Microsoft will not be scanning user emails
to target relevant advertisements. However, it is early yet and we
should not forget that Microsoft is trying its utmost to promote
Bing. Google, on the other hand, is facing heat regarding privacy
matters related to Gmail.
The new e-mail service managed to generate lots of excitement
among techies, with the first million users signing up within hours
of launch. Microsoft is trying to build on this momentum and hoping
to reach the one billion mark.
Microsoft intends to infuse an element of fun into the service
by collaborating with
Facebook
(
FB
) -- and soon with Skype and Twitter -- and narrowing the gap
between social data and emails. This strategy could help bring back
a few customers that they lost earlier to Google and Yahoo.
Microsoft is one of the largest software companies in the world.
The company's operating systems are installed on the majority of
computers anywhere in the world. The company has been innovating on
many fronts and has many new and exciting products lined
up.
For the fourth quarter of fiscal 2012 ended in June, Microsoft
reported revenue excluding deferrals of $18.05 billion, which was
up 3.7% sequentially and 4.0% from last year, exceeding estimates
by 0.4%. All except the Windows segment contributed to the increase
in the last quarter, although Server & Tools and Entertainment
& Devices were particularly strong.
Currently, Microsoft Corporation has a Zacks Rank of #3, which
implies a Hold recommendation in the short-term (1-3 months).
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