Microsoft has repackaged and relaunched its free Hotmail product. The new preview boasts a new look and a wealth of new features.

Hotmail is the world’s largest online mail service, with 324-million users registered. However it is being challenges by Google’s Gmail and Yahoo Mail. Together, these three offerings account for about 99% of the free e-mail market.

Hotmail was launched eight years ago, and this is the first major change to the online mail service. boasts a fresh, clean user interface that’s intuitive to use, works across devices with Exchange ActiveSync, and gets the clutter out of the user’s way with 60% fewer pixels in the header and 30% more messages visible in the inbox.

In addition, there are no display ads or large search boxes that take up that extra space. preview is connected to Facebook, Twitter, LinkedIn, Google, and soon, Skype. Users can view pictures of their friends, messages, status updates, chats, calls – all powered by an always up-to-date contact list that is similarly connected to those networks.

The product automatically sorts messages from contacts, newsletters, shipping updates, and social updates, and with sweep users can move or delete them in a few clicks. Plus, the service includes free Office Web Apps – Word, Excel, PowerPoint and OneNote, as well as SkyDrive.

It also puts users in control, and has a range of tools for power users.