Microsoft counters Google with Hotmail overhaul

Windows Live Hotmail will get new online editing capabilities for Office documents as well as other enhancements for business users

Microsoft is trying to counter Google by overhauling Windows Live Hotmail with new online editing capabilities for Office documents, and more than two dozen other enhancements for business and home users.

Microsoft's refresh of Hotmail is being announced Tuesday, less than a week after the release of Microsoft Office 2010.

[ Take a look inside Office 2010, Microsoft's newest suite. | Discover what's new in business applications with InfoWorld's Technology: Applications newsletter and Killer Apps blog. ]

Microsoft strikes blow against Google with Office 2010

"The moment you receive an Office document as an attachment in Hotmail -- Word, Excel, or PowerPoint -- you can open and view the attachment online in any popular browser, on PC or Mac and even if Office is not installed," Microsoft said in its latest announcement. "This results from the seamless integration between Hotmail, SkyDrive [Microsoft's free online storage service] and the Office Web Apps, so you can send, receive and work on a document with others."

Google, of course, offers online editing of documents through Gmail's integration with Google Docs, and the ability to import Microsoft Office documents into Google's online office suite.

Microsoft is increasingly adding to its lineup of Web-based office tools, while offering integration with existing on-premise software installations of Microsoft Office.

New Hotmail features announced this week will be incorporated into the service over the next few months, Microsoft said.

Microsoft promised improvements in the visual quality of Office documents displayed in web browsers, and said it will be easy for users to move back and forth between the Web-based version and the Office software installed on their PCs.

The announcement acknowledges that users may still need to use the packaged software version of Office for "intensive editing tasks."

"If you need to perform intensive editing tasks, you can go from editing the document in your browser with the Office Web Apps to editing it in an Office application on your PC," Microsoft said. "When you're finished, any edits you made to the document on your PC will be automatically saved back into the cloud where you can then keep the document stored for only you to see or share it with others."

Hotmail and Gmail are locked in a battle for second place in the webmail market. Each have more than 40 million users in the United States, with Hotmail claiming a small lead over Gmail. Yahoo still has more than twice as many users as its nearest competitors.

In addition to further Office integration, Microsoft said the new Hotmail will have enhanced security with full-session SSL; smarter junk mail filters; and a "Trusted Senders" feature making it easier for users to distinguish between legitimate messages and scams.

Hotmail will also have conversation view -- a feature Gmail already has -- making it easier to view a single conversation that is spread out over many emails.

Hotmail users will be able to send up to 10GB of photos per message, and Microsoft, not surprisingly, is rolling out new mobile features to take advantage of the expanding smartphone market. For example, Microsoft said Hotmail will be optimized for rich mobile browsers and touch screens, while supporting "filters, in-line message previews, HTML messages, offline email viewing, conversation threading, the ability to flag messages, the option to turn header details on or off, and more."

Users will be able to synchronize email, calendar, and contacts between their phone and the Web using Exchange ActiveSync, and download new mobile Hotmail apps. Microsoft said Hotmail mobile apps will be unveiled on "BlackBerry, Nokia, and many other phones," but did not mention the iPhone or Google's Android platform.