New Hotmail--it's a classic

Microsoft embarks in a years' long redesign of its Web mail program only to find most of its users like things the way they are.
Written by Ina Fried, Contributor

MOUNTAIN VIEW, Calif.--Microsoft had been tinkering with Windows Live Mail for months, but testers still weren't happy.

The program was too slow to load, too different and, well, just not like the old Hotmail it was intended to replace.

It was a painful realization for the more than 100 managers and developers on the project. In banking on a snazzy Web 2.0 application to try to catch up to rivals Yahoo and Google, Microsoft had dramatically overshot its audience.

But Mike Schackwitz, one of the program managers on the mail redesign, had an idea.

Web mail market

Months earlier, a small team had started working on a second version of Windows Live Mail. At first, it was just a very limited program designed for people whose browsers wouldn't run the new program. But in recent weeks, the team had decided to add a few tricks to it and turn it into a "classic" version that felt more like the old Hotmail.

What if that version was the new Hotmail, or at least the default option for most people, Schackwitz thought.

In October, he approached a few colleagues with the idea. Although such a move would be counterintuitive, key leaders on the project quickly realized that he was right. Bowing to its users, and despite grumblings from the developers, Microsoft shifted much of the team away from the "full" version and onto classic.

On Monday, Microsoft took the beta tag off the Hotmail redesign, and its classic mode took center stage. The full version with its Outlook-like look and feel is still there for those who want it, but it's not the default interface.

The change was hard on many levels. It pushed the product behind schedule. It meant less time spent on the fancier Web 2.0 client that competes most directly with Gmail and Yahoo's new mail program. And it raised the question of whether Hotmail will ever move beyond its reputation as the Web mail program for the technologically challenged.

The legacy problem
It's a situation Microsoft has often faced in other parts of its business, particularly Windows. It has a tougher time making radical shifts, even necessary ones, because it has a large user base it can't afford to leave behind.

Images: Hotmail goes retro

While Microsoft was building out the classic mode, Yahoo was adding other features, most recently building instant messaging directly into the new mail program. Google was refining its integration of chat, as well as building ties between Gmail and its online spreadsheets-and-documents program.

The shift to make classic mode the view most users will see was also painful from a morale perspective.

"A lot of the team felt dejected at this point," product planner Richard Sim acknowledged.

But the move was clearly necessary. Despite months of work, the main version of Windows Live Mail was still way too slow for many users' taste. It was particularly slow over dial-up connections, still used by roughly a third of Hotmail users, particularly outside the United States.

Microsoft had designed Windows Live Mail to feel more like a desktop program than a traditional Web page. To do so, however, such Web applications have to download a significant chunk of code before they can open a single message. Classic mode, which loads like a traditional Web page, doesn't allow things like drag-and-drop editing, but it feels much faster on a slow connection.

Extreme makeover

Classic mode wasn't the only bitter pill the development team had to swallow. Even in the full version, it turned out that many customers still wanted to select messages using check boxes rather than a mouse click or keyboard shortcut, much to the dismay of Microsoft's programmers.

"They were digging in their heels," Sim said.

Another popular feature in desktop e-mail programs is the "reading pane" that shows the top of an e-mail before it is opened.

But Sim's sister was among the significant group of Web mail customers who didn't want it. "It makes me feel vulnerable if I have this preview pane," Sim said she told him. The preview pane is still there in full mode, though Microsoft no longer opens the first message automatically in it.

Even changing the Hotmail name proved to be too much of a shift. What was once Windows Live Mail is now Windows Live Hotmail, a reflection of the fact that much of the venerable Web mail program has remained.

Microsoft also is holding back from quickly forcing its users onto the new version. Although those who sign up for Hotmail will automatically be taken to Windows Live Hotmail, existing users will still have to opt in, though Microsoft does hope to move all users over in a period of months.

The redesign effort, even its more ambitious aspects, is not a total wash, however.

Both the classic and full modes sit atop a far more modern engine, the internal part of the mail system. With Hotmail, Microsoft was at the end of its development rope. Every new feature basically had to be "hacked" into the code.

The new code can support multiple interfaces, not just Hotmail's classic and full modes, and can support sending mail information to other Microsoft properties as well as potentially to third parties.

Already, Microsoft has said it will use the new mail engine to power Office Live mail accounts as well as a new Windows Live @ Edu effort, in which Microsoft is trying to get universities and public-school systems to allow it to power their mail.

For those who really want a more Outlook-like experience, Microsoft has another option: Outlook. Microsoft plans to make available in a couple of weeks a new test version of its Outlook connector software that will enable anyone with a copy of Outlook 2003 or Outlook 2007 to use the software to access Windows Live Hotmail messages and contacts.

Microsoft also plans to offer a separate Windows program, Windows Live Mail, which is similar to the Windows Live Mail desktop program that the company has been testing. That software, set to run on Windows XP and Windows Vista, is designed to work with Hotmail as well as e-mail accounts from rivals. It will feature contextual advertising tied to the contents of users' e-mail, though users will be able to turn off the "active search" feature.

Windows Live Mail will be one of Microsoft's first desktop programs to include advertising, though the company is considering making other consumer programs available in an ad-supported fashion.

Kevin Doerr, the Windows Live general manager in charge of the redesign, likens Microsoft's lesson of going too far with the Hotmail redesign to that of New Coke. In 1985, Coca-Cola changed the formula of its namesake soda, only to find that most people hated the new taste. The company was forced to revert to the old formula, which became known as Coca-Cola Classic.

"Even in software, you can go broke underestimating how little change people want to experience," Doerr said.

Microsoft isn't alone in its challenges trying to get Web mail right. Yahoo's redesigned mail is still in beta, as is Google's Gmail. Yahoo plans to drop the beta moniker in the coming months, while Google would not say just when it will move out of beta.

Yahoo has also found that some users want to use check boxes, adding back the boxes in its most recent test version, which is being rolled out to current users.

"We thought it would be a natural enough experience for users that they would be able to drag and drop, and use keyboard shortcuts," Yahoo spokeswoman Karen Mahon said. "The feedback we heard from our users is, they were lost without the check boxes, so we put them back."

In some ways, Microsoft's failures worked to its advantage. Few workers would have been excited by the prospect of building a new mail engine rather than leaving the interface largely unchanged. It might have also proved a tougher sell to get the resources needed for a ground-up rewrite.

Even Sim, who joined the Hotmail effort in August 2004, said it might have been a tougher sell for him, had he known how much would have to stay the same.

"I came thinking I would change the way people would communicate online," Sim said.

Indeed, that's the same draw Gmail product manager Keith Coleman sees in his job. "It's really exciting to do that because you can change the way people's lives work," he said. "The risk, of course, is something like what it sounds like Hotmail is seeing. If you take too big a leap, people get lost."

The Hotmail team believes that, despite taking a circuitous route, it has found a happy medium. But it doesn't plan on staying in the realm of the comfortable forever.

"That doesn't mean you shouldn't continue pushing," Doerr said. "It means you need to understand that and honor that and figure out a way to transition them from where they are today to where they should be."

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