I read about Domains.live.com, Microsoft’s new free email service on Scoble’s blog last week. Domains.live.com is a pretty neat service where they host email and IM for you for a domain that you already own. The list of free offerings includes 20 email accounts within your domain (instead of hotmail.com or msn.com), 250 MB inbox, Hotmail web accessibility along with the standard junk mail filtering and virus scanning.

So you have a domain and you want to use Hotmail’s email and IM functionality instead of your ISP’s base offerings. To do that with Domains.live.com, you modify the MX record for your domain name and set the mail exchange host provided by Microsoft for your domain name. Once you make your DNS change and update the TTL on your side, Domains.live.com verifies the DNS change and then you are ready to start creating accounts. You can create up to 20 email address for each domain and the process really works well. To check out the functionality, I updated the DNS record for one of my host and everything worked like a charm. I was able to setup an email address and then log into Hotmail and MSN Messenger using that address and everything worked great. Kudos to Microsoft and the Custom Domains Team.

My only complaint is that you cannot use the new email addresses created using domains.live.com with Microsoft Outlook or any other POP3 email client. To do that, you need to buy some Hotmail upgrade for $20. That is just lame. Come on Scoble – You’ve got to be able to work your magic and change this. This is really a great and innovative idea by Microsoft and trying to make $20 off someone just ruins it.

Microsoft, live.com, domains.live.com, Scoble, MX, Hotmail, mail, IM