Two weeks ago, Microsoft launched Outlook.com,  a new free Web-based e-mail service. Why would Microsoft launch Outlook.com when they already have Hotmail, especially when Hotmail is still the world’s largest e-mail service, with 324 million members? It could be because Gmail, only six years old, now has 278 million users.

The launch seems to have gone well.  In just two weeks, Outlook.com has registered 10 million new users.  Though this is a long way from Gmail’s large user base, 10 million is no small number.  However, expect many of Outlook.com’s new users to be Hotmail users.  Microsoft is obviously hoping with Outlook.com, that it can snatch away some of Gmail’s users.

Today’s webmail services are no longer the days of old, where it was just to email someone.  Now people use it to chat, get their news, and connect with their friends in their networks.  Not that Hotmail doesn’t have any of that but when people think of Hotmail, they think of a dinosaur webmail system.  So with Outlook.com, a brand name on its own from the corporate email software, Microsoft is hoping that Outlook.com can be the new cool kid on the block that can compete against Gmail. Unfortunately for Microsoft, Hotmail’s bad reputation exists from the image that it is full of spam, fake addresses and an ugly design.

Some of the features of Outlook.com come from Hotmail, such as with one click, sweep all e-mail from a particular sender into the trash. It also has a one-click Unsubscribe button that removes you from the mailing lists of legitimate companies. It can even auto-delete all but the most recent message from a company.

Outlook.com can easily categorize your messages. For example, it has auto-detectors that look for messages from social media networks and messages containing photos. Photos and file attachments appear at the top of the message that contains them in big, bold letters. If the file is an Office document, you can open the file right there in the message, even if you don’t own Office. The file opens in Microsoft’s online version of those apps. Like Gmail, you can read, edit and collaborate, as long as you’re online.

File size limit is also less of an issue with Outlook.com.  You can send photos, videos or any other files as large as 300 megabytes each. This puts Gmail’s 25-megabyte attachment to shame.

Outlook integrates with other social networks too. You can write a note to a Facebook friend without leaving your e-mail window. You can even see someone’s latest Facebook or Twitter update right in that pane.

Microsoft also attempts to attract Gmail users by offering them a one-click setting that adopts Gmail’s keyboard shortcuts. You can even keep your Gmail address, and use Outlook.com for sending and receiving the mail itself. With this you can have your cake (Gmail) and eat it too (Facebook and Twitter integration).

But I doubt many Gmail users will switch despite all these new features.  Most people are happy with their Gmail service.  Plus Gmail is very much integrated with the rest of Google’s services.  That said, Outlook.com is way ahead of the game compared to Hotmail and even Yahoo.  It’s still early so if you want to get an Outlook.com account, you probably can still have it with your name.  Unless you have a very common one.