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Hotmail's Revamp Could Impact Ads - Big Time

Microsoft is making a major overhaul to its Hotmail email program - a 15-year-old system that has remained largely stagnant. A lot of the changes are aimed at the user workflow, making it easier to sort and organize emails by certain categories, including social media status updates.

It also is making it easier to send multiple photos, online videos as well as view such content.

Finally, its security features have been greatly improved, making it easier to control spam.

Pay Not to Play

All of this should make marketers happy - except for one additional change, according to PC World. Users can eliminate ads by paying $20 a year.

Hotmail users - now about 360 million strong - are more likely to opt out. Its "ads are more distracting than Gmail's-and less useful, too, since they're not based on keyword scans of your inbox," PC World says.

Gmailers More Engaged

Hotmail advertisers, though, had other problems with the service before this latest wrinkle. In general, Gmail users are more engaged with their service than Hotmail’s, according to a survey last year by Mail Chimp. (via MarketingCharts). It found that subscribers to Google's popular Gmail service exhibit higher click and open rates and lower bounce rates than subscribers to Hotmail - as well as Yahoo and AOL - and thus appear to be more engaged with the email messages they receive.

It also found that Gmail users exhibited a 7.41% click rate compared with click rates less than 5% for the other services.

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