Hotmail isn't so hot, it seems, or at least the direction at which it could take is up in the air. Microsoft wants to maintain the user base that Hotmail has built up over the years, but also use Hotmail as an advertising platform to interest people in Windows Live personal services, a variety of them at that. Their biggest dilemma is how to prevent alienating existing users with an overload of ads, but still keeping the costs of Hotmail down. That may seem like a no brainer for Microsoft, but business is business, even if it is a free business.
"Removing one of those ad products is a very costly thing," product planner Richard Sim told his colleagues during a meeting about the ad issue, among others. But in the end, everyone knew what had to be done. Painful as it was, they had to side with their users and hope the dollars would be there.
For now, it will remain largely unchanged. But a year from now? It seems competing with g-mail isn't as easy as they thought.