The outage hit accounts across the globe on 13 March but as of today (14 March) Microsoft is claiming the service is functioning normally and has also stated not all the Hotmail and Outlook accounts were down.
"Fixing the problem is taking longer than we hoped. We apologise for the lengthy interruption in service," said Microsoft in statement.
Microsoft’s cloud storage service SkyDrive was also hit by a similar problem which was also solved.
Hotmail has 360 million accounts and claims to be the world’s largest free email service while Microsoft is currently migrating the users to its newly launched Outlook service by this summer.
The company’s move is aimed at recovering the ground lost to rivals including Google, whose Gmail service has been growing in popularity.