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If you get an error when clicking on a URL link form within an e-mail in Outlook 2007 that indicates:

General failure. The URL was
"qwerty". The system cannot find the file specified.

Having shown that, it then goes on to open up the default browser or a new tab in the default browser if it is already open. It goes to the correct URL.

This does not happen with links in other software, I currently either had Safari or Mozilla Firefox set as the default browser.

To eliminate the error I found that if you set the default browser to Internet Explorer this goes away. It then opens up IE when the link is selected.

To set IE as the default browser, Open up IE and perform the following:

Tools Menu> Internet Options> Programs> Default Web Browser and select Make Default then click OK

This just recently started happening so I am not exactly sure what changed. It must have been due to an Outlook 2007 application update.