Hotmail, it seems, has dropped a few notches on the sizzle factor - it's not hot anymore - or so believes Microsoft. The largest software company in the world, on July 30, launched its online e-mail service - Outlook - a revamped, Facebook-friendly, renamed version of its Hotmail service. It's sayonara Hotmail and hello Outlook! Should Gmail be worried?

Microsoft launched Hotmail in 1996 with very little changing over time. In a bid to reclaim its market share and negate losses at the hands of competitor Google Inc.'s fast-growing Gmail, Microsoft Corp unveiled its new online e-mail service - Outlook.com.

In a blog post, Chris Jones (Microsoft's Corporate VP of Windows Live) noted that "A lot has changed in the last eight years, and we think it's time for a fresh look at email."

According to research form comScore, as of June 2012, with 324 million users (i.e., 36% of the global market) Hotmail had maintained its stronghold as the world's largest online mail service. However, the software company is fast losing out on users to arch rival Gmail, which now accounts for 31% of the market.

Statistics always give glimpses into the market story - comScore reveals that Hotmail ranks as the No.3 e-mail provider with 41 million monthly users vis-à-vis leader Gmail's 68 million. At No.2 and No.4, Yahoo Mail and AOL account for 84 million and 24 million users, respectively.

Microsoft is renaming its Hotmail service Outlook - a name corporate workers are only too familiar with. The company is redefining the user experience and focusing on giving users the "extra" to draw them in. The service's look has been spruced up with new features for handling junk and mass mail on board. Social network integration will also play a major role in the new service. Users will be able to link up with their Facebook, Twitter, LinkedIn, and Google+ accounts, and be able to see the latest updates from friends and contacts. Online chat is available via Facebook.

The new look is spiffy and uncluttered and features plenty of white space, which is only too reminiscent of the recent Gmail makeover. With Outlook, Microsoft is focusing on the user experience rather than revenue generation via ads, as was the case with Hotmail. Users will be pleased with the appearance of unobtrusive adverts, in a column to the right of the screen, while sieving through folders. The distracting adverts do not appear whilst reading a mail.

Outlook e-mail service also allows access to Microsoft's Internet-based products. These include SkyDrive and Office Web Apps. The buzzword is that eventually, the service is likely to have Skype video chat built in. The e-mail service also tackles the perennial problem of Gray Mail - i.e., mails to which we have subscribed like newsletters, offers, daily deals, and social updates. According to Microsoft's research, Gray Mail makes up a whopping 80% of our inbox.

Help is at hand as Microsoft will combat this overflow. The new service automatically detects mass messages and puts them in separate folders. What's more users have the option to customize the sorting process.

Debates over Outlook's success are raging. Critics aver whether users will take to the new name as a fish takes to water. Moreover, Outlook has a history of e-mail annoyances.

"We want to signal the right thing - that this is fundamentally new," says Brian Hall, who runs Microsoft's webmail services. "If we'd called it Hotmail Version 2, does that signal that? No. Not to mention, Hotmail doesn't mean 'Mail from Microsoft'. Outlook does. So we thought, let's not maintain this schism between professional-quality stuff and stuff we give away online for free. We figured we've got one great brand that means 'Mail from Microsoft', and that's Outlook."

If you're eager to get a taste of Microsoft's e-mail offering there'd no need to hold on to you horses. This week onwards, anyone can sign up for an outlook.com e-mail address. Are you a current Hotmail user? Don't fret as nothing will change for you as of now. However, in the coming months you may be prompted to switch to the new Outlook interface. Even then you will be able to keep your existing Hotmail address.

Microsoft said that the service is currently a "preview", implying that additional features can be expected in the near future.

With Microsoft's Outlook unleashed, Google's Gmail has some stiff competition to contend with. Take a dekko yourself and be the judge. The service can be accessed at www.outlook.com.