Can Microsoft's Outlook.com 'Scroogle' Google's Gmail?
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Minyanville Staff
Minyanville
February 21, 2013

Microsoft (NASDAQ:MSFT) will spend between $30 million and $90 million on the ad campaign for its new Outlook.com service. This service is a revamp of Hotmail, which was left behind in the wake of competition from Google’s (NASDAQ:GOOG) Gmail and Yahoo (NASDAQ:YHOO). The new email service has been in a preview period since July 31, accepting only limited numbers of users. But now, the service is open, and so begins yet another attempt of Microsoft to reclaim its standing as a tech top dog.

The new campaign will complement the company’s anti-Google “Scroogled” ads, which draw attention to features of Gmail that invade user privacy. The ads are an obvious and somewhat desperate attempt by the former king -- and now underdog -- to regain a significant share in Internet searches. (Google has nearly 67 percent of public searches, while Microsoft’s Bing has 16.5 percent.)

Despite being one of the most expensive ad campaigns for an email service ever, Microsoft’s latest media barrage is -- compared with some of the company's recent campaigns -- on the cheaper side. According to Ad Age, Microsoft spent some $1 billion advertising Windows 8 and the Surface for its November launch and the 2012 holiday season. Looking back further, the company spent $500 million advertising its motion sensing device for the Xbox 360's Kinect.

Additionally, Microsoft has recently made a deal with National CineMedia (NASDAQ:NCMI) to play two-minute ads before movies. The deal, for an undisclosed amount, will include all of NCM’s 183 markets, with 19,300 movie screens ripe for reaching younger crowds. This marks the first long-term advertiser that National CineMedia has had in its 10-year history, with most ad campaigns being one-and-done deals with Samsung (PINK:SSNLF), Old Navy (NYSE:GPS), Kraft (NASDAQ:KRFT), Taco Bell (NYSE:YUM), Best Buy (NYSE:BBY) and Microsoft.

So what makes the new Outlook so special? Why is Microsoft launching what it calls the biggest marketing blitz in the history of email? The company is confident that the new email service will reclaim some of the email market share lost when its allowed Google and Yahoo to overtake Hotmail as the world’s biggest and most cutting-edge provider. The new Outlook allows the sending of massive files, and features address books that automatically update new contact inform from social networking sites Facebook (NASDAQ:FB), LinkedIn (NYSE:LNKD) and Twitter. It also has 60 percent fewer ads than Hotmail.

The redesign for the new Outlook is sleek and clean, but its new features are not revolutionary. Google already has a version of Gmail that can send large file sizes, and it will continue updating until all users are able to send hundreds of photos at once, just like with Outlook.

During its preview period, the new Outlook attracted some 60 million account holders, including 20 million that Microsoft claims left Gmail. As of December, ComScore said that Outlook had 38 million users, compared with the reported 425 million account holders that Google says Gmail has.

The ads alone will not catapult Microsoft back to its former glory, but maybe the product will catch on as alternative to the seemingly more and more ubiquitous Gmail.

In another front of the consumer tech battlefield, Google announced today that it will be opening up retail stores, much like Apple’s (NASDAQ:AAPL) highly successful ventures, and Microsoft’s much more recent and untested stores. The news seemed like a logical and confident move for the company, whose Nexus, Android, and Chrome OS products continue to gain market traction. On the other hand, Microsoft’s new ads for Outlook, and especially its “Scroogled” campaign, seem a bit desperate.

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