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It was noted that the original "Windows Live Web Messenger" featured tabbed conversations in a "conversation workspace", however since its integration with Hotmail this has been removed.Microsoft's search engine Bing was integrated into Hotmail in 2009 through the introduction of a "Quick Add" feature, allowing users to add search results from Bing into emails. On May 18, 2010, Microsoft unveiled the "Wave 4" update of Hotmail, which offered features such as 1-click filters, active views, inbox sweeping, and 10 GB space for photos, Microsoft Office documents, and attachments.On August 8, 2017, Microsoft launched a new opt-in beta toggle allowing users to test upcoming changes to the Mail, including a faster inbox, a responsive design, and the ability to search for emojis.On October 30, 2017, Microsoft announced that it would phase out its "Premium" subscription service, which offered features such as expanded storage and removal of ads from the user interface.Windows Live Hotmail was awarded PC Magazine In 2008 it was announced that the service would be updated with focus on improving the speed, increasing the storage space, better user experience and usability features, and that sign-in and email access speeds would be up to 70 percent faster.The classic and full versions of Windows Live Hotmail were combined in the new release.

Microsoft's new email system was announced on November 1, 2005, under the codename "Kahuna", and a beta version was released to a few thousand testers.

In 2002 Hotmail still ran its infrastructure on UNIX servers, with only the front-end converted to Windows 2000.

Later development saw the service tied with Microsoft's web authentication scheme, Microsoft Passport (now Microsoft account), and integration with Microsoft's instant messaging and social networking programs, MSN Messenger and MSN Spaces (now Windows Live Messenger and Windows Live Spaces, respectively).

As a result of user feedback, Hotmail was updated so that scrolling works for users who have the reading pane turned off.

It was also expected that Hotmail team would be moving the advertisement from the top of page to the side, adding more themes, increasing the number of messages on each page and adding the ability to send instant messages from the user's inbox in future releases.

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