Microsoft’s Hotmail is still popular among users, but the company has decided to give it a new name ‘Outlook’ and add some new features to the old Hotmail brand.

Don’t confuse Outlook with the e-mail client that you have been using at the office. Microsoft has added a new free consumer-focused version of Outlook, which will replace Hotmail. So from now on when you hear people talking of Outlook assume that they are talking of the new consumer version.

“There was a perception gap with Hotmail from tech enthusiasts and youth,” said Brian Hall, Windows Live general manager. “Many of them wouldn’t take a second look at Hotmail and they would say, ‘I don’t feel comfortable having this next to my name.’ … People understand Outlook is mail from Microsoft, so we thought this branding made sense.”

Microsoft this year is really gearing up. It has made some strict changes and new additions in its lineup that include introduction of Windows 8 OS, Office 2013Windows Phone 8 for smartphones, improved SkyDrive cloud storage, updated Xbox 360 softwareWindows Azure with newly added IaaS support, and more. With all these company has made clear its intentions of coming out as a strong company.

Microsoft has kept the design of new Outlook simple with white background and small header at the top. “We kept many features people liked from Hotmail, but added a clean, fresh, modern design,” Hall said. “This is by far the cleanest email service today.”

With Hotmail turning to Outlook, Hotmail will give its users the option of choosing their e-mail address. They can either stick to “” or switch over to “”, but all users will get the new design and new background.

One of the most astonishing features of the new Outlook is that Skype calling has been added to it. Now that Microsoft is the new owner of the Skype, the company will try to integrate the feature in most of its products. It has started with Outlook. Though, besides that the company has also added the feature in its Windows Phone and Lync. What’s more interesting is that with the new Outlook, all you need to do is simply click at the video chat button and you can start video chat with your email contacts. This function will work even if you don’t have Skype installed on your system.

Some of the other features that Microsoft has added in new Hotmail are that you can chat with people using your Outlook along with Facebook friends. This means that your Outlook account will be linked with your Facebook account. New Outlook will also give you the option of changing the color of the top bar, turn on a reading pane, and more.

Furthermore, new Outlook will also use Microsoft’s Office Web Apps, which can be used for viewing and editing documents. Sky Drive cloud storage has also been added to the new Outlook. This will help users save and view files from Outlook to their Sky Drive accounts.

What’s more is that the product isn’t completely free, as it includes advertising. The left corner of the screen will have a small advertising block, but the ad will only appear if you hover the mouse over the block.

On the whole, Microsoft has played a smart move by introducing this new Outlook. Microsoft’s service will tune-up close to other top end email services such as Gmail and Yahoo.