Cause:

The default browser has been changed from IE to another application. and corrupt some registry entries.
Solution:
Close outlook and any web browsers you may have open.
Open an elevated command prompt window
Type the following commands line by line into the command prompt window:

REG ADD HKEY_CURRENT_USER\Software\Classes\.htm /ve /d htmlfile /f

REG ADD HKEY_CURRENT_USER\Software\Classes\.html /ve /d htmlfile /f
REG ADD HKEY_CURRENT_USER\Software\Classes\.shtml /ve /d htmlfile /f
REG ADD HKEY_CURRENT_USER\Software\Classes\.xht /ve /d htmlfile /f
REG ADD HKEY_CURRENT_USER\Software\Classes\.xhtml /ve /d htmlfile /f

Open Outlook and try again.