Microsoft testing new e-mail subscription service

Microsoft is testing a new subscription Hotmail service that includes 2G bytes of e-mail storage and a copy of Outlook 2003 to access the service from the desktop.

The "premium subscription" service is called Microsoft Office Outlook Live and is being tested in the U.S. by a small group of beta users, a Microsoft spokeswoman said on Monday. Other than e-mail, the service also includes the MSN Calendar and MSN Address Book, which are also accessible with the Outlook 2003 client, she said.

Microsoft Office Outlook Live appears to be an extension to Microsoft's current MSN Premium. This US$9.95 a month service includes the Outlook Connector, a tool that lets users access their MSN services from within Outlook version 2002 or newer. However, MSN Premium does not include a copy of Outlook, Microsoft Office Outlook Live does.

Microsoft executives have been discussing an expanded hosted e-mail service separate from MSN Premium for several months. The service would be targeted especially at businesses that don't run their own e-mail server. MSN Corporate Vice President Yusuf Mehdi, at an event for investors in May alluded to the service.

"Advanced e-mail and small business services, these are another big set of things that we're investing in," Mehdi said, according to a transcript of the event. "There's a lot of demand for people who use Outlook as an e-mail client who don't have an Exchange Server."

Microsoft hopes to offer a final version of Microsoft Office Outlook Live with unspecified additional features in the first half of 2005, the spokeswoman said.

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