Microsoft relaunches Hotmail as Outlook, and with social side

Microsoft unveiled a redesigned, Facebook-tailored version of its free online e-mail service on Tuesday in an effort to reverse market losses for Google's rapidly growing Gmail.

The world's largest software maker will change the name of the Hotmail service to Outlook by changing its appearance, making it easier to connect to social networks, and offering new features to handle the mountain of commercial e-mail and spam that buries many users' inboxes.

Hotmail remained the world's largest online email service in June, according to the latest comScore data, which estimates its total users at 324 million, or about 36 percent of the world market.

But the brand is losing users to Gmail, a rival that has been growing rapidly and already holds 31 percent of the market. Yahoo is stable at 32 percent.

In an effort to regain growth, Microsoft will change the name of the service to Outlook, a brand known to most office workers who use Microsoft Office e-mail, and improve the user experience. Hotmail users will be invited to adopt the new service over the next few months.

Hotmail, launched in 1996, was one of the first online email services, and Microsoft had not updated it for eight years.

"A lot has changed in the last eight years and we believe it's time for a fresh face email," said Chris Jones, vice president of Microsoft's Windows Live division, in a blog post.

The new look is simple and unpolluted, with lots of white space, and it recalls the recent reformulation of Gmail undertaken by Google. Advertising is served discreetly in a column on the right portion of the screen, and only when the user is looking at their file folders. Ads are not served when messages are open.

Users will be able to easily connect to their Facebook, Twitter, LinkedIn, and Google+ accounts to see the latest updates from their friends and contacts. You can also access the Facebook chat.