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Microsoft New Hotmail Takes Aim at Google

Like all parents, Microsoft likes to tout the accomplishments of its offspring. Any conversation about Hotmail is likely to start with the fact that, at least globally, the free Web mail service has more active accounts than any of its rivals.

Pressed, though, company officials also see Hotmail's shortcomings. In recent years, rivals Google and Yahoo have been ahead of the game when it comes to adding things like conversation views, mobile synchronization and other features. And Yahoo has more U.S. accounts, while Google has been growing faster than Hotmail. Beyond any one feature, though, Hotmail has come to be perceived as a technology laggard, rather than a leader.

Images: The New Hotmail

"We're not where we want to be," Microsoft Corporate Vice President Chris Jones said on Monday at a briefing in San Francisco.

In attempting to turn things around, Microsoft is falling back on an important parenting lesson--teaching its child to be better at sharing.

A key feature in the coming update to Windows Live Hotmail is an improved ability to share photos and Office documents using a combination of Web-based editing tools and cloud file storage. The new version, which will begin being offered to most users in July or August, aims to offer a better alternative to the standard attachment. Instead, Hotmail will offer the option of uploading a file or photo to Microsoft's SkyDrive service and e-mailing a link, as opposed to the file itself. The approach has several advantages, including avoiding issues related to file size limits that often make it hard to share videos, presentations, or large collections of photos. Recipients can then either download the files, or, in the case of photos, view an online slideshow.

The new version also allows users to view photos or videos from third-party services, such as Flickr, SmugMug, Hulu, and YouTube, all without having to leave Hotmail. The revamped Hotmail also adds a new "sweep" option that lets users easily divert mail from a particular sender into either a new folder or into the trash.

Read more about Hotmail at CNET

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