OK, just admit that Outlook's lame--and fix it, already

Smart e-mail may be a contradiction in terms, but let's get a show of hands: how many of you believe Microsoft is going to supply the answer?

I didn't think so.

When the company brain trust repairs to the Ballmer Bunker to chew over its next big idea, post-Yahoo, I've got a suggestion: how about doing something to deal with e-mail and its discontents? Something grand--like bringing Microsoft Outlook into the 21st century. I don't mean a tweak here and there; I'm talking about a top-to-bottom overhaul.

The product debuted in 1997 and has improved very little since. Given the absence of real competition for most of the last decade, you shouldn't be surprised at the glacial pace of improvement. We saw the same thing in the browser market after Microsoft disposed of Netscape (though perhaps the nascent rivalry with Google's Gmail is a harbinger of change.)

I was talking earlier with Rafe Needleman, who runs our sister site Webware, about Outlook and its discontents. Rafe noted that while Outlook is the most important application in the business world, the product still remains flawed in any number of ways. At one time, Microsoft had ambitions to build Outlook into a platform. Unfortunately, developers found the APIs difficult to use and nothing much happened.

But it's best to forget about waiting for incremental improvements. Rafe correctly observed that Microsoft can't fix Outlook without a complete rewrite. His conclusion is that you can't patch and make it better. (Listen to our conversation at the tail end of today's News.com daily podcast. For a deeper dive, check out this compendium of "Tech Nightmares" that CNET put together four years ago. The shame is that it remains as relevant today.)

The answers more likely will come from start-ups like Xobni and others investigating ways to add more intelligence to the program. Good luck to any third party that can manage that trick. What with a growing backlog of unread e-mails in my in-box--not to mention the daily dose of spam--users deserve a smarter Outlook that better prioritized and understood the tapestry of shared relationships between people.

Xobni, which came out of beta testing today, has received a bounty of attention because its backers include Vinod Khosla and Niklas Zennstrom. (Getting a freebee compliment from Bill Gates hasn't hurt.)

The challenge for Xobni and the rest is how to build a business that can scale. In the end, Microsoft will wind up spending some of the newly freed $42 billion in its coffers to buy Xobni or some other lucky third-party developers. Then we have to cross our fingers and pray that corporate infighting at the mother ship doesn't make a hash of it all. (I know. That's little help in the near-term. In the meantime, CNET's Josh Lowensohn has a great piece on favorite in-box work-arounds used by some of the folks at Microsoft.)