Microsoft yesterday showed off its new cloud-based personal email application Outlook.com, its first personal email client since it launched Hotmail in 1996.

Outlook.com runs alongside the new Outlook desktop application and it uses Exchange ActiveSync to power email across various devices.

Microsoft has included free Office Web Apps – Word, Powerpoint, Excel and OneNote – within the email client. Emails are automatically sorted depending on the sender, while SkyDrive is integrated into Outlook.com for extra file size.

The service offers social media integration with Facebook, Twitter, LinkedIn and Google. Personal email comes with photos of friends, recent status updates and Tweets as well as the ability to chat and video call. Skype is in line for future integration.

Microsoft was keen to tout its security credentials to assuage any fears about privacy with the new social media integration.

“We don’t scan your email content or attachments and sell this information to advertisers or any other company, and we don’t show ads in personal conversations,” it said in a blog post.

“We let you decide whether to connect your account to social networks, and which ones you want to use – and you’re in control of who you friend or follow.”

The release marks the first step in the phasing out of the Hotmail service. Hotmail users, and others, can upgrade to Outlook.com, and the accompanying @outlook.com email address, from today.