Microsoft (Nasdaq: MSFT) is rolling out an ambitious update to its Windows Live Hotmail platform.
It's about time.
The beefed-up free email service will borrow a bit from what's working at rivals Yahoo! (Nasdaq: YHOO), Google (Nasdaq: GOOG), and AOL (NYSE: AOL), while also tacking on features that showcase the world's largest software company's push toward cloud computing.
In other words, Microsoft is going to expand SkyDrive storage functionality for photo attachments and work seamlessly on Office attachments through its new Web-based application.
Are snapshots, word-processing files, and spreadsheets a big deal through email? Apparently they are.
"On Hotmail alone, people send and receive more than 1.5 billion photos and 350 million Office documents every month," Microsoft concedes in its blog entry announcing the changes.
Some of the other changes may seem Gmailesque, but it's important to remember that neither Microsoft nor Google owns this space. Internet traffic watcher comScore finds that Yahoo!'s platform attracted 95.5 million unique visitors domestically last month, more than Microsoft and Google combined. The rub in the data is that Yahoo! is the only service of the three to have seen a decline in usage over the past year.
Email has historically been tough to monetize. Users are turned off by obtrusive ads. This also isn't the realm of search, where visitors show up because they want to go somewhere else. Folks crack open their email viewers with little intention of being talked into heading elsewhere. And Google let Yahoo!, Microsoft, and AOL drum up their audiences for years before entering the fray with Gmail.
One also has to wonder whether social networking will eat into email strongholds. Facebook and News Corp.'s (NYSE: NWS) MySpace are already hotbeds for photo-sharing, text chats, and friendly email.
Consumers obviously won't mind the arms race. Having free services roll out new features and expand storage and attachment limits will make the Internet's best deal even better. Once the search providers nail a way to truly cash in on their users beyond text and display ads that largely go unseen, we may be on to something.
What features would you like to see in the leading email services? Share your thoughts in the comments box below.
