Originally posted by: Forbes.com
Rosoff says the impact on Microsoft will be minimal from a financial standpoint. Only 5% to 10% of Hotmail's free users are thought to have used the Outlook feature regularly. Hotmail is thought to have between 170 million and 180 million active users.
But the change might create a competitive opening for rivals Google (nasdaq: GOOG - news - people ) and Yahoo (nasdaq: YHOO - news - people ), which both operate popular Web mail services.
Hotmail is still the leader of the pack, with a 33% percent share of the market, according to research outfit Radicati Group of Palo Alto, Calif.
Yahoo is nipping at Hotmail's heels with 30%. The firm estimates there are between 300 million and 400 million active Web mail accounts in use globally. It offers two gigabytes of storage for $20 per year and allows its users to access their mail with external e-mail programs via so-called POP3 protocol.
Google's service, which launched in April and unleashed an arms race to boost storage, is still not out of its public Beta-testing phase, but
has captured a 4% market share, which is sufficient to make it the third most popular Web mail service on the Internet, says Radicati analyst Marcel Nienhuis. The remaining 33% of the market has been carved up by others in the space including Lycos, a unit of TerraLycos, Sina.com in China and Excite.com, a unit of AskJeeves.