Microsoft sweeps Hotmail accounts

One Hotmail user, Arianna, said she signed on to her e-mail account last week to find the system had emptied out her in-box—including important messages about her upcoming wedding — but left her junk-mail folder full.

"It definitely felt like strong-arming, like 'See what can happen if you don't pay us,'" said Arianna, a community college professor who lives in San Francisco.

Long the reigning free program for Web-based e-mail with more than 110 million users, Hotmail has made several policy changes to the service in the last nine months that add up to a big push for paid membership. Such moves could rebuild free e-mail services including Hotmail and Yahoo Mail as the next tollbooths for Net consumers, even though many Web surfers signed up for e-mail accounts early on thinking that they would be free for life.

More broadly, Microsoft is eager to increase adoption of its various Internet services including Hotmail and wallet software Passport as part of its .Net strategy — an overarching effort to connect all of its online properties and products using a common set of Internet technologies and Microsoft software.

Since Microsoft's $400 million acquisition of Hotmail in January 1998, the company has maintained its heritage as a popular free online service despite dramatic changes in the Internet economy. But as Microsoft has started to introduce .Net — which also serves to push subscription revenues — the company is increasingly urging people to spend money with its services.

"It all has to do with the .Net strategy of driving as much adoption on the consumer side and eventually as much revenue as possible," said Matthew Berk, analyst at Internet research company Jupiter Media Metrix. "In addition to Hotmail, Microsoft is enforcing use of Passport." Passport and Hotmail accounts are linked by the same registration.

News source: MSNBC - Microsoft sweeps Hotmail accounts

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