Anyone who was around for the advent of email in the mid-to-late 1990s will remember the sheer popularity of Hotmail.
As one of the first web mail services to hit the internet, Hotmail was quite the popular destination for those hoping to communicate with friends, family, coworkers, and strangers alike. Today, just about 25 years since its launch, the word “Hotmail” might not even ring a bell for younger generations born after its inception.
It’s funny how things change, isn’t it? At its peak Hotmail was THE email client. And it was acquired for an enormous sum. So how much was Hotmail sold for back in the ’90s? And is it even still around?
Who Launched Hotmail?
Back in 1996, Hotmail was launched by Sabeer Bhatia and Jack Smith — two businessmen who prioritized freedom and accessibility for their webmail service.
They spent many months competing with RocketMail (which would eventually become Yahoo! Mail) to be the top webmail provider, which is quite strange to consider in hindsight. Imagine that: only two email services to choose from.
Bhatia and Smith hoped for their service to be accessible anywhere in the world, setting a global standard for what an email provider should be. Unbelievably, his was about six years before Gmail was even invented.
What Was The Reason Behind Creating Hotmail?
This freedom that defined Hotmail was a big part of why it was created in the first place.
Smith was the founder and president of a website called EEE, which built custom-made internet web solutions in the early days of the web. Bhatia, on the other hand, worked at Apple (AAPL).
The two took what they knew about the web at the time and focused on one key concern that transcended all else: the need for anonymity and security on the internet.
Needless to say, Sabeer Bhatia and Jack Smith set an important precedent for internet companies — they let developers across the globe know how important it was for email to be both private and secure.
Who Sold Hotmail To Microsoft?
Eventually, as Hotmail’s popularity continued to grow and the competition started heating up, many big tech companies were racing to create their own webmail service to get in on the action.
One way to do this was to simply buy up an existing popular service and slap the bigger company’s name on it. RocketMail was bought by Yahoo! for this very reason, and Hotmail followed suit.
Hotmail sold to Microsoft (MSFT) in 1997, and they soon added it to their MSN banner.
By 1999, Hotmail had become the biggest email server in the world. Thanks to the help of Microsoft and the existing popularity of MSN, Hotmail was localized across the globe and allowed to grow into a true behemoth of the web. However, over the coming years, Hotmail faced some of its biggest challenges yet.
A massive security flaw that allowed anyone to log into any account simply by entering “eh” in the password field was discovered in 2001, and Google’s launch of Gmail in 2004 — both of these factors combined to take massive swings at Hotmail, effectively hobbling it somewhat.
While MSN is still around, it’s no longer the home for Hotmail. As with any other big tech company, there’s a near-constant amount of innovation going on at any time, and this has resulted in Hotmail changing hands under the Microsoft umbrella several times since its acquisition in the late ’90s.
How Much Was Hotmail Sold For?
The true numbers behind Hotmail’s sale to Microsoft aren’t exactly known, but it has long since been estimated to be somewhere in the 400 million dollar range.
This is a massive number, to be sure, and one that matches many of the major sales that occurred during the dot-com boom of the ’90s.
The sale for $400 million also speaks volume to the sheer popularity of Hotmail at the time — by comparison, RocketMail sold to Yahoo! for a much smaller $92 million the same year. That’s less than 1/4 the amount Hotmail received from Microsoft in 1997!
Does Hotmail Still Exist?
In 2012, Microsoft thought it was high time to merge their slew of different email service providers into one unified service. It was called Outlook, and it absorbed Hotmail in July of 2012 before eventually moving Hotmail users to Outlook’s website in 2013.
Of course, this doesn’t mean that everyone with a Hotmail address — many of which dated back to 1996 — had to suddenly get a new email address. Microsoft allowed for emails to still be sent to and received from Hotmail addresses; they just no longer allowed anyone to sign up for a new Hotmail address.
This integration was seen as long overdue and came after many attempts at re-inventing the software, most notably after the launch of Gmail in 2004 and the launch of a Hotmail overhaul in 2011.
Is Outlook The Same As Hotmail?
Despite being absorbed by it, Hotmail is not the same as Outlook. Almost a decade since being merged with Outlook, it’s rare but still possible to encounter a Hotmail email address out in the wild. This tells you that the two email addresses are distinct but equal: Hotmail users can still send and receive emails because they existed before the merger, but it’d be impossible for someone to get a new Hotmail email address in the wake of the Outlook merger.
Outlook continues to change its look and improve its features regularly, so there’s no way to know if they might eventually force a move from Hotmail to Outlook somewhere down the line. For now, though, Hotmail users continue to use their email address the same way they did back in 1996. The owners have changed, the websites have changed, but the addresses still stay the same.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.