New version of Hotmail to launch next week

Redmond (WA) - Microsoft will update Hotmail.com on Monday to give users more storage and enhanced connectivity to Messenger, but not much else.

Windows Live Hotmail has been in the works for over a year, but on the surface there hasn’t been a lot of change. The main draw Microsoft points to is its 2 GB storage capacity, which is still overshadowed by Gmail’s growing capacity currently at about 2.85 GB.

The catch-up game to Gmail also shows in Live Hotmail’s e-mail conversation grouping. Seen in Gmail from day one, it will group all replies with the original e-mail. A visual update to the interface will also come with the new version of the web-based e-mail application.

Searching through e-mail archives will also be more intuitive, says Microsoft. A premium version of Live Hotmail will be available for an annual fee of about $20, which ups the storage to 4 GB and opens up other "expanded options".

Existing Hotmail users won’t need to do anything on Monday, and all e-mails will remain in tact through the transition.