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Ina Fried

Staff Writer, CNET

Microsoft has started private testing of a service that would offer consumers, on a subscription basis, access to the company’s Outlook e-mail and calendaring program, along with 2 gigabytes of e-mail storage.

Microsoft Office Outlook Live, as the service is being called, would be a paid service that would let consumers use Outlook to manage Hotmail-based e-mail, calendar and contact information. In the current beta, customers are being given 2GB of mail storage, the ability to send individual messages with up to 20MB of attachments, as well as a downloadable version of Outlook.

Outlook Live, which the company began testing last week, is similar to the Outlook Connector feature Microsoft currently includes as part of its MSN Premium service, which costs $9.95 a month.

A Microsoft representative said Outlook Live would be a separate paid service but declined to comment on what it might cost. The company said it hopes to ship Outlook Live in the first half of next year.

Microsoft first demonstrated a version of the Outlook connector at a meeting with financial analysts in July 2003. The Outlook Connector feature was added when Microsoft debuted the MSN Premium service at the end of last year.

One of the key differences is that the Outlook connector does not include Outlook and is aimed at customers who already use Outlook 2002 or later. Outlook Live subscribers get a subscription version of Outlook 2003 as part of the package.

Microsoft also said it hopes to have additional features by the time it is ready to launch Outlook Live. The company had an animated Flash presentation about the program on its Web site for a time.

Some details about Outlook Live were earlier reported by BetaNews.

Earlier Monday, Microsoft launched a public test version of its desktop search program but did not mention Outlook Live during a conference call with reporters.