When Will MSN Up the Hotmail Ante?

Microsoft is readying a strategy to counter e-mail storage moves by Google and Yahoo. Customers have their own ideas as to what Redmond should do.

When will MSN bite the bullet and come up to par with its Hotmail competitors, particularly in the area of free e-mail storage?

For now, MSN is still offering the same 2MB of free e-mail storage—compared to the 1GB offered by Googles newly minted Gmail and the 100MB now offered by Yahoo Mail. (Microsoft currently charges $60 a year for 100MB of free Hotmail storage.)

BetaNews is reporting that MSN has pinpointed July as the target date for launching its e-mail storage counterattack.

July makes sense, as Microsofts new fiscal year kicks off on July 1. And various MSN officials have been hinting that Microsoft is readying new Hotmail-related products for launch any time now.

Last week, Bruce Jaffe, the chief financial officer for the MSN division, told institutional investors at the Deutsche Bank Securities Media Conference in New York, to watch for Microsoft to launch a new small-business tool that makes use of Hotmail and Outlook technologies. It sounds as if this new tool will take the existing Office Outlook Connector for MSN technology a step further.

"Our first product here is going to be using Outlook that uses the Hotmail e-mail infrastructure. So you dont need to have an Exchange Server if youre a small business; you can just use Hotmail and you can have that synchronized experience, as well as the calendaring and everything else with other people who are on Hotmail. So thats taking some desk applications and services and bringing them online and marrying them with our communications back-end effort," Jaffe explained to analysts.

On Friday, BetaNews quoted Blake Irving, vice president of MSNs Communication Services Group, as saying, "We are going to respond in a big way and will eliminate e-mail storage as an issue for our users."

When asked earlier this week about how it plans to respond to recent e-mail storage moves by its competitors, a Microsoft spokesman told Microsoft Watch: "We have nothing specific to announce at this time, but we remain committed to listening to our customers and continuing to invest in and innovate Hotmail.