Hotmail bytes back in e-mail server war

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This article was published 17/07/2004 (7984 days ago), so information in it may no longer be current.

TORONTO — Hotmail, the world’s largest free e-mail server, may have saved itself from becoming the world’s most obsolete e-mail server. With Google’s hotly anticipated Gmail service set to arrive in the near future and offer users a free gigabyte of storage space, and Yahoo recently boosting its capacity to 100 megabytes, Microsoft’s Hotmail has issued its own response. Starting this fall Hotmail users will get 250 megabytes of free storage — up from two megabytes now — and this summer they’ll get virus scanning on incoming mail. Users will also be able to send and receive 10-megabyte attachments.

Hotmail officials say the key was the virus scanning, but that they recognized storage was an issue.

“We’re realistic that the market has changed,” said Ruth D’Souza, director of marketing for MSN.ca.

“We don’t want storage to be an issue, so we’re offering users the kind of capacity they’re coming to expect from the market.”

In addition to the increased storage for free accounts, MSN will introduce Hotmail Plus. For $30 annually, customers will receive two gigabytes of space.

Previously, if a Hotmail user wanted 100 megabytes of storage, it would have cost $60 a year.

Hotmail set the standard for free e-mail service at the beginning of the Internet boom. It was fast, had a simple interface and quickly became the most popular mail server on the web.

With the latest move, MSN officials hope their customer base will stick to familiarity rather than switch to size and speed when Gmail hits the market later this year.

“We have over 170 million active (international) Hotmail users,” said MSN marketing manager Lisa Daly. “We’re the world’s largest web-based free e-mail service. So we’re constantly trying to listen to our customers to continue to innovate Hotmail.”

Most of the innovations the company has offered in the last few years, like moderate storage upgrades and personalized e-mail addresses, have only been available with the minimum service upgrade that cost $19.95 a year.

But now, Gmail hype is sweeping through Internet message boards and news sites, and it’s hard to find any criticism of the new service’s interface among users getting an advance look.

“It absolutely destroys Hotmail in terms of speed and layout,” said a Kingston, Ont.-based web designer on a Canadian message board.

Though they are proud of their status as the world’s biggest e-mail provider, the weight of their membership was the main reason MSN has been dragging its heels when it comes to upgrading its free service.

“We do have an extensive user base and their expectations for quality are high so it’s important that we’re smart about any changes we make,” Daly said.

— Canadian Press