Microsoft Losing Marketing Battle for Email Users

Hotmail is dying.  As I noted several months ago, my Hotmail account was the direct casualty of the coming of Gmail. There were even online eulogies.  Despite every reason to keep using Hotmail (I use their messenger client, run windows at work, even have a complete address book set up at my Hotmail account) - I too made the switch last year and left Hotmail behind.  A recent Marketing Sherpa study release says the same thing.  People are leaving Hotmail.  But what is the primary reason for this mass defection?  In my previous post, I suggested that Hotmail was a victim of its own initial dominance in the webmail space.  People had their first email addresses at Hotmail, have held them the longest, and therefore now receive the most spam there as they signed up for offers, ordered products and distributed their Hotmail address widely across the Internet.

Looking deeper at their demise, I wonder if perhaps branding was a key part of their problem as well.  Google has Gmail, Yahoo has "Yahoo Mail" - both of which tie to their parent brands.  "Hotmail" was an anomaly.  Did this mean the brand of Hotmail didn't get the same marketing support as other Microsoft initatives?  Word, Excel, Powerpoint all started with the "MS" tag in front of them.  They are clearly Microsoft brands.  The MSN butterfly came onto the scene late.  Today Hotmail, Messenger and Passport all have the "MSN" tag in front of them - and perhaps for MSN Messenger or the Passport network this will work, because Microsoft was still establishing the brands.  But they are all based on the success of Hotmail, which hasn't turned out the way Microsoft envisioned.   As odd as it seems to find Microsoft on the losing end of a marketing strategy battle - in Hotmail it seems that's exactly where they are.