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TheStreet Open House

Microsoft's Outlook Takes Aim At Google's Gmail

The Outlook ads will overlap with an anti-Gmail marketing campaign that Microsoft launched earlier this month. The "Scroogled" attacks depict Gmail as a snoopy service that scans the contents of messages to deliver ads related to topics being discussed.

The Gmail ads are meant to be educational while the Outlook campaign is motivational, said Dharmesh Mehta, Outlook.com's senior director.

"We are trying to push people who have gotten lazy and comfortable with an email service that may not be all that great and help show them what email can really do for them," Mehta said.

By Microsoft's own admission, Hotmail had lost the competitive edge that once made it the world's largest email service. The lack of innovation left an opening for Google to exploit when it unveiled Gmail nearly nine years ago.

Gmail is now the industry leader, although estimates on its popularity vary.

Google says Gmail has more than 425 million accountholders, including those that visit only on smartphones and other mobile devices. The latest data from research firm comScore, which doesn't include mobile traffic, shows Gmail with 306 million worldwide users through December, up 21 percent from the previous year. Yahoo's email ranked second with 293 million users, a 2 percent decrease from the previous year, followed by Hotmail at 267 million users, a 16 percent decline.

Microsoft, which is based in Redmond, Wash., is counting on Outlook.com to catapult the company back to the top of the email heap. During the preview period, Outlook attracted 60 million accountholders, including about 20 million that defected from Gmail, according to Microsoft. Comscore listed Outlook with 38 million users through December.

The new features being introduced in Outlook include: the ability to send massive files, including hundreds of photos at a time, in a single email; address books that automatically update new contact information that connections post on Facebook, Twitter and LinkedIn; and about 60 percent fewer ads than Hotmail.

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