Microsoft Says Outlook.com Has 60 Million Users

Microsoft Corp. said its free Outlook.com Web-based e-mail service has gained 60 million active users in its first six months, with a third of those switching from Google Inc.’s Gmail.

Microsoft had expected it to take a year to reach that level of usage and it took Gmail two years to get there, Dharmesh Mehta, a senior director for Outlook.com, said in an interview. A third of active users are Gmail customers now using Outlook.com as their primary free e-mail account, he said.

While free e-mail isn’t a huge money-maker -- Mehta said Outlook.com carries about 60 percent fewer advertisements than Microsoft’s previous Hotmail product -- the Redmond, Washington- based company considers it critical to gaining and retaining consumers. Microsoft, the world’s largest software maker, has been losing users of its Windows operating system to smartphones and tablets such as Apple Inc.’s iPad.

Outlook.com, accessed mainly via Web browsers, shares the brand name with Microsoft’s e-mail, contacts and calendar program, part of the Office suite of software installed on personal computers running Windows.

The software has been in preview since July 31. Microsoft is releasing the final version today, with features mostly unchanged. Outlook.com works on Windows-based machines, as well as Apple’s. There’s also an application for devices running Google’s Android mobile-operating system.

To promote the service, Microsoft is beginning what Mehta says is the biggest-ever advertising campaign for an e-mail product, spending “tens of millions” of dollars on U.S. television, online, print and bus ads to market Outlook.com. The company will also run TV ads in Europe in the coming weeks.

Microsoft will also begin moving customers to Outlook.com from its Hotmail service, Mehta said. Microsoft will initially encourage Hotmail users to switch before moving them permanently by the end of the first half. While Hotmail users can keep their old e-mail addresses, they will use the new Outlook.com interface, Microsoft said.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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