Hotmail's new address

MOUNTAIN VIEW, Calif.–After an hour-long discussion at a status meeting last month, the Hotmail redesign really boiled down to one key decision: one big ad, or two?

After months of reworking the venerable Web mail program, Microsoft’s team had made all the easy fixes: They’d added more colors and even offered a way to make the new Windows Live Mail look just like the old Hotmail.

But sitting around a table in the nondescript Pyre conference room in Microsoft’s Silicon Valley offices, the half-dozen developers and managers couldn’t avoid the thorny issue that remained. A significant number of people believed that the new design had too much space devoted to ads, making it hard to use some of the mail program’s new features.

The ad placement decision may seem minor. But it’s a key one for Microsoft, which is trying to turn Hotmail’s hundreds of millions of casual e-mail users into customers for a wide variety of Windows Live personal services.

Offer too many ads and the company risks alienating users and sending them flocking to rival online services. But if it forsakes the second ad, it risks choking the revenue the business needs to compete with the likes of Yahoo and Google.

Full article: ZDNet