Time to bid farewell to your old Hotmail account – Microsoft has finally gone and replaced its long-standing email service with the revamped Outlook.com, which the company claims has already accumulated more than 60 million active users since its ‘preview’ launch six months ago.

Dozens of Hotmail users have already made the switch, and those that haven’t done so yet will find themselves automatically switched over to the new service before the summer, said Microsoft in a blog post yesterday. The company insists that users need not be concerned – all their old emails, data and contacts will be retained, while they can also continue using their old @Hotmail.com address if they desire. Passwords, folders and other settings will also be migrated to the new service, minimizing the upheaval for users, added Outlook.com’s David Law in the blog post.

But don’t go thinking that this is just some minor makeover that Microsoft has initiated – far from it. There will indeed be plenty of new changes, including a cleaner interface and navigation structure, one that is obviously built off of Microsoft’s new Windows 8 operating system. In addition, Outlook offers dozens of new ‘usability’ features designed to make life easier, such as the “Sweep” automation that allows users to mark, delete or move multiple messages at once, and integrated Facebook chats.

Another big change is the integration of SkyDrive, Microsoft’s answer to Google Drive, which makes it easier to share Word, Excel and PowerPoint documents with other users – a feature that should be especially useful for those who need to share larger file sizes. Outlook’s software eco-system has also been given a major update in comparison to Hotmail, with photo attachments automatically displaying as a slideshow, and the ability to access and edit documents online using the Word Web App, meaning that it’s no longer necessary to own a copy of Microsoft Office.

Microsoft vs. Google: Round 2

In order to attract new users, Microsoft is embarking on one of the biggest marketing blitzes in its history, with Outlook being plastered all over the prime time TV ads, websites, billboards, buses and radio waves. According to AP, Microsoft has set aside a war chest of between $30m to $90m for its Outlook marketing spree, as it attempts to steal users away from arch rival Google’s Gmail service.

The campaign is part of a much greater effort by Microsoft to derail Google’s lead in search and email. The company has launched a sustained attack on its rival with its amusing “Scroogled” ads, which have accused Google of favoring its own services in its search results, and more recently, of snooping on user’s emails.

The stats regarding email usage are a little less clear than those related to search, where Google has a clear lead on Bing and other search engines. Google claims that Gmail counts over 425 million users, which includes those that only access the service through mobile devices. However, ComScore – which doesn’t count traffic from mobiles – said that Gmail had 306 million active users as of December 2012, a 21% increase on the previous year. Going by these figures, Google still ranks as top dog, but only just – with Yahoo email claiming some 293 million users, up 2% from the year before, and Hotmail ranking in third with 267 million users, down 16% on last year, according to ComScore.

Microsoft freely admits that Hotmail had lost its edge in recent years. The service, which was once by far and away the world’s leading email client, suffered badly from a lack of innovation that was ruthlessly exploited by Google when it launched Gmail back in 2004. Outlook is without doubt a much worthier competitor to Gmail, and with the promise of new features to come (like integrated Skype calls and a calendar), and it’s sleek, edgy new look, it’ll be interesting to see how much of Google and Yahoo’s user base it can steal.