Scott Butler Min Choi Nick Shaver Charles Sims Microsoft Hotmail Scott Butler Min Choi Nick Shaver Charles Sims

Microsoft vs. Google And Webmail Hotmail vs Gmail Microsoft and Google are competing in many fields. Search engine Productivity software (Office products) Web browser Operating System Web applications Mobile applications and operating systems etc, etc, etc. And Webmail Hotmail vs Gmail Slide 1 engage “Clash of Titans” Micro and Gmail wanting to do the same thing (keep old slide) microsoft know for this, google known for this… in the end they’re both doing the same thing (google apps office, gmail hotmail, bing google, IE chrome) show how each started as opposites and are doing the same now Microsoft vs. Google Source: Bing Image Search (composed by Min)

Background Communications is 35% of all time spent online Social Networking penetration is growing fast and taking share from Instant Messaging E-mail remains a primary communication vehicle with steady share Slide 2 backstory What changes are you seeing over time Email is the a primary use on the internet (time spent online pie graph from Paul) Hotmail is our brand has a vast consumer base… good Focus on what people do online, paint picture of what people do online Background Source: ComScore Media Matrix Inc.

Microsoft Online Services Business Hotmail Microsoft Online Services Business Windows live Hotmail MSN Bing Gmail Slide 3 build tension keep graph of current email market Bring in Hotmail is big and healthy, not growing like Gmail but not declining like AOL… Growth rate of gmail is going to take over hotmail by = WHEN? Everything above shows the reasoning behind focusing on email engine that drives these other pieces of business (phones, search engines etc… everything is becoming universal) Out of the 350 million users over 80 percent use Microsoft relate products including MSN search. (Hotmail is still big and healthy idea) In the email market, Hotmail holds the #2 spot below Yahoo. Google’s Gmail has rapidly moved up and has just passed AOL to take the #3 spot. At current growth rates, Google will surpass Hotmail by the end of 2010. By becoming the largest free email provider Microsoft will see increases in customer’s use of Microsoft’s other products including MSN search and Windows Microsoft Online Services Business (In millions, except percentages) 2009 2008 2007 % Change 09 vs 08 % Change 08 vs 07 Revenue $3,088 $3,214 $2,434 (4)% 32% Operating loss $(2,253) $(1,222) $(604) (84)% (102)% Current Email Market Source: ComScore Media Matrix Inc.

Focus Group Conclusions Early Free Large Email Storage Strong Link To Other Free Services Easy to use and aesthetically pleasing interface Gmail Changed Email Market Hotmail lost popularity in Transitioner Market Hotmail = Dial up; Gmail = Broadband Hotmail is primarily used for spam accounts Weak Hotmail-Microsoft recognition Hotmail Brand Perception Problem Slide 4 bring it to a boil Brand perception problem… focus group Gmail changed email market (huge memory etc) Hotmail used to be big time, became joke server where people sent spam, dial up Focus Group Conclusions Source: Microsoft Inc. annual report

What are we going to do for Hotmail? No additional costs to improve/change Hotmail. Hotmail will continue to suffer loss of market share and slowly die out. Leave it as-is. Many users equate Hotmail with the age of Dial-up, while Gmail is seen as a modern, broadband email. Confusion and dilution of Microsoft’s email service (Live, MSN, Hotmail…) Switching Brand Microsoft is well positioned to extend strong connection of productivity on the desktop to online services like free email. Microsoft fights an uphill battle to change perception of Hotmail’s weak brand. Rebranding Hotmail Slide 5 offer choices kill it, keep it, change it Tables on tag lines and new busy Gmail did great at positioning toward a specific audience What are we going to do for Hotmail?

Rebranding Hotmail.. How? Slide six provide resolution Why we decided to reposition Repositioning: New busy makes sense (survey work) Hotmail strong in tagline category, something there Rebranding Hotmail.. How? Source: Leeds Business School Project Management Group(Microsoft Group)

Rebranding Hotmail.. How? Source: Leeds Business School Project Management Group(Microsoft Group)

Rebranding Hotmail.. How? Source: Leeds Business School Project Management Group(Microsoft Group)

Rebranding Hotmail.. How? Source: Leeds Business School Project Management Group(Microsoft Group)

SWOT Analysis Strengths New busy is accurate in this era Hotmail is still leader in active accounts (350 Million) Recent Microsoft success have bolstered Microsoft brand (Windows 7, Bing) Weaknesses Although accurate, “New Busy” doesn’t resonate emotionally Hotmail is a step behind Gmail Current perception of Hotmail is negative Few barriers to entry in free email market Homogeneous free email product Weak link between Hotmail and Microsoft Opportunities Hotmail taglines tested well, meaning consumers are open to a Hotmail rebranding Accuracy numbers indicate there is an open window for marketing to emotionally connect consumer with “New Busy” with new marketing concept Microsoft has opportunity to play underdog (Google = evil empire) Room to grow Hotmail/Microsoft connection Threats Other large email services (Gmail, Yahoo) can get to it first Customers don’t want to be labeled Small group of strong competitors Google/Gmail connection much stronger than Microsoft/Hotmail Slide seven set up the sequel how make the new busy stick specifics campaigns SWOT Analysis

SWOT Analysis Strengths New busy is accurate in this era Hotmail is still leader in active accounts (350 Million) Recent Microsoft success have bolstered Microsoft brand (Windows 7, Bing) SWOT Analysis

SWOT Analysis Weaknesses Although accurate, “New Busy” doesn’t resonate emotionally Hotmail is a step behind Gmail Current perception of Hotmail is negative Few barriers to entry in free email market Homogeneous free email product Weak link between Hotmail and Microsoft SWOT Analysis

SWOT Analysis Opportunities Hotmail taglines tested well, meaning consumers are open to a Hotmail rebranding Accuracy numbers indicate there is an open window for marketing to emotionally connect consumer with “New Busy” with new marketing concept Microsoft has opportunity to play underdog (Google = evil empire) Room to grow Hotmail/Microsoft connection SWOT Analysis

Threats Other large email services (Gmail, Yahoo) can get to it first Customers don’t want to be labeled Small group of strong competitors Google/Gmail connection much stronger than Microsoft/Hotmail SWOT Analysis

How to make the “New Busy” stick Develop a marketing plan that makes stronger connection between Hotmail and Microsoft Convey the mobile perception of Hotmail sticking with the idea of New Busy “Windows Live Hotmail: A click away from Windows® to the new world.” Top Recommendations How to make the “New Busy” stick