Microsoft reacted to reports comparing MSN Premium with Windows Live Hotmail, defending its subscription web-based service centered around email. The reaction from the Redmond company came to criticism that the features, functionality and capabilities it is offering via MSN Premium for approximately $10 per month have equivalents that are available free of charge to all Windows Live Hotmail users running either Windows XP or Windows Vista. Of course, Microsoft has rejected the criticism claiming that there are multiple reasons why MSN Premium users are charged for the service. As a consequence, the company has explained the subtle differences between what MSN Premium has to offer and what Windows Live Mail brings to the table.

"MSN Premium was designed to appeal to a different audience than the free Windows Live services and we continue to support this service and our subscribers. MSN Premium offers customers a single integrated client experience that simplifies web access, multiple accounts, service integration, and access to information via the 'Dashboard'. While Windows Live includes many comparable services, MSN Premium includes software as part of the subscription, including Encarta Premium, and offers additional functionality such as download manager and SpySweeper. Many customers are also attracted to MSN Premium's advertisement-free experience, while Windows Live services are ad-funded", Microsoft replied as cited by SeattlePI.

The MSN Premium - Windows Live Hotmail measuring contest can swing either way, with strong arguments to support both services. Of course, the fact that MSN Premium comes with a subscription-based model is an advantage for some users who do not want to be hassled by advertising. A luxury that Windows Live Hotmail users can only permit themselves with Hotmail Plus, which costs almost double compared to MSN Premium. At the same time, MSN Premium, in the context of the much fresher Windows Live Hotmail, is nothing but an outdated service, whose faults will end up surpassing its benefits. And MSN Premium has quite a few faults, starting with the aging browsing client and ending up with the limited amount of storage. 10 GB might be more than Windows Live Messenger's 5 GB, but Google is catching up with Gmail already offering 6 GB, while Yahoo has already been offering unlimited storage space.