Microsoft rolls out Hotmail enhancements

Microsoft is set to begin rolling out the latest enhancements to its Hotmail Web mail service, with an aim to reduce clutter and make it easier to send photos and handle Office documents.

Microsoft is taking a clear shot at Google's success with its online Docs service by making a Web-based version of Office available from within Hotmail's Web interface that allows use of widely used document formats such as Word, Excel, PowerPoint and OneNote.

The latest version of Hotmail will let users open and modify those document types within the browser with no additional software to download, said Dharmesh Mehta, director of product management for the company's Windows Live business. For richer document graphics, users will need to install a plugin for Silverlight, Microsoft's multimedia application.

Google has done a good job of integrating Gmail and Docs, but the service lacks the capability to faithfully convert Office documents, Mehta said. Google hasn't fully implemented the specifications Microsoft has published for its Office suite, he said. That's a problem, Mehta contends, since the vast majority of documents that are exchanged via e-mail are Microsoft formatted.

Hotmail users will be able to store documents using Microsoft's SkyDrive online storage and set permissions that allow for collaboration on the same document, Mehta said.

It's essential for Microsoft to rework its profitable Office franchise into a mix of free offerings, such as the latest integration with Hotmail, along with the more advanced versions of Office it sells, said Clive Longbottom, service director and business process analyst with Quocirca.

Consumers are less likely these days to purchase Office, as the free Works package ships on most PCs, and companies can allow their employees to use a copy of Office at home. But securing the consumer market is essential to keeping control over the office productivity software market, Longbottom said.

"They have to be worried about what happens in the consumer space," Longbottom said. "If consumers really do take to Google Docs, it is a real big issue for Microsoft."

The company is also leveraging SkyDrive to make it easier to share photos. Users frequently encounter problems with attachment limits either on the sending or receiving side, Mehta said.

Microsoft is skirting around that problem by automatically creating a SkyDrive folder with photos as someone sends an e-mail with photo attachments. Rather than attaching multimegabyte photos with the message, Hotmail will instead send a thumbnail of the photos while the full-size photos are sent to SkyDrive.

Users can then opt to see the photo within a new photo viewer built inside Hotmail or download a zip file with all of the photos. If a Hotmail user receives a group of photos in an e-mail, Hotmail will display thumbnails and then allow a larger view of the photo with the built-in viewer.

Mehta said Microsoft has also made changes to make it easier for people to see what's behind a link send in an e-mail, a feature called "Hotmail active views." For example, if someone sends a Flickr or a YouTube link, a Hotmail user will be able to see that content from within Hotmail rather than opening a new browser tab.

Google has a similar feature within Gmail for its own services. On the technical side, it's not necessarily easy, as the link needs to be delivered in a format that's recognized by the Web mail service in order to work properly. Microsoft's long-term goal is to establish an industry standard for how those links can be formatted, Mehta said.

Another Hotmail feature will allow users to automatically see the tracking information for a package if there is a tracking number in an e-mail, Mehta said. That prevents a user from needing to copy the tracking number, open another tab for FedEx, for example, and then querying their item.

Other free Web mail providers will likely build similar features in their offerings, but Microsoft has "put a bit of thought into it. It's not going to be massive game changer, but what they've done is interesting and useful," Longbottom said.

Microsoft is also introducing a raft of features to make e-mail tidier, such as optional conversation threading, filters to direct messages from certain senders into a particular folder and highlighting messages users likely don't want to miss, such as those from social networking services or frequent contacts.

On the security side, Microsoft is implementing DKIM, or DomainKeys Identified Mail, a system for linking an e-mail with cryptographic authentication, which is designed to make it easier to filter out spam.

In another effort to shore up security, Microsoft will also introduce one-time passcodes for Hotmail sent by SMS to a person's mobile phone. The one-time passcode would be used instead of the person's normal password at, for example, a public computer that might be infected with malware. Due to arrangements Microsoft has made with operators around the world, users will not be charged for the SMS, he said.

Later this year, Microsoft plans on introducing SSL (Secure Sockets Layer) encryption for Hotmail, although the company has not decided whether it will be optional or not, Mehta said.

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