Is Hotmail going down the tubes?
Despite persistent rumors that Hotmail's free e-mail service has gone to the dogs since Microsoft bought the company, industry analysts pooh-pooh the idea.
"I've seen some rumors that the network has been a little less reliable since that happened, but I suspect it's something that could be fixed pretty easily," said Patrick Keane of Jupiter Communications, a New York-based online research firm. "I don't see it as a, 'Microsoft buys them and it's a long road downhill.' It's not a big deal, basically."
Analysts say users usually put up with the natural sluggishness of Web-based e-mail because of its convenience, but in recent weeks users have accused Hotmail of dropping in quality since the Microsoft acquisition.
"I've been using it for a year and a half, and there's sometimes a lot of lag time," said Christine Sei, who uses the account to receive special-interest group e-mails. "It'll be OK for a while, and then it'll really lag down. Sometimes it can take three to five minutes to pull up an e-mail, which is kind of annoying.
"And as soon as they put the Microsoft name on the site it got slower," she added.
Microsoft announced its intention New Years' Eve to buy Hotmail for an eye-popping $300 million to $400 million, in order to add free e-mail to its Microsoft Network online service. Hotmail is now operated as a wholly owned subsidiary of Microsoft.
Another user reported she had twice been shut out of her account for a day or more, while Hotmail made renovations. Several said they had noticed a slowdown since Microsoft bought it.
Analysts speculated that with Hotmail's high rate of growth -- the service now numbers 11 million users, and says it's gaining about 70,000 new customers daily -- some technical glitches are bound to show up: "Any performance issues could be related to that," said Barbara Ells, a senior analyst with Zona Research. But any notion that Hotmail is letting its quality slip is very unlikely, she said.
That's because without reliability, a free e-mail service has little to differentiate it from its competitors, according to Keane. "Microsoft said that one of its reasons for purchasing Hotmail was the scalability of its technology in general, and that's one thing you're going to be able to tout over other services in this very competitive space," he said. "Reliability is going to be crucial, it's crucial to how you do business."