The world’s largest software company will rebrand Hotmail – naming it Outlook and offering a Facebook-friendly version through social network links and junk handling facilities.

Microsoft will phase out the service to compete with Gmail and email services from Apple and Yahoo – mirroring the name of their new release on their professional email software.

After launching Hotmail in 1996, Microsoft has failed to update the service for eight years, with Outlook branded as clean, uncluttered and hosting subtle advertisements.

Users can link up with sites including Facebook, Twitter, LinkedIn and Google+, allowing online chat will the eventual instalment of Skype video chat to follow.

"A lot has changed in the last eight years, and we think it's time for a fresh look at email," says Chris Jones, Microsoft's corporate vice president of Windows Live.

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