MSN Hotmail: From Zero to 30 Million Members in 30 Months

REDMOND, Wash., Feb. 8, 1999 — When Hotmail co-founders Sabeer Bhatia and Jack Smith approached the venture capital firm Draper Fisher Jurvetson with their idea for a free email service in 1995, the firm praised the idea but wondered how they would attract members and build a company around it. Today, just 2-1/2 years after its July 4, 1996 launch, Hotmail is the world’s largest email service, with more than 30 million active members.

To put this growth in perspective, consider the population of Canada. It took Canada some 400 years to reach its current population of 31 million — a number that Hotmail, after just 30 months, will soon overtake. Wired’s December 1998 issue stated: “The Hotmail user-base grew faster than any media company in history – faster than CNN, faster than AOL, even faster than Seinfeld’s audience.” Indeed, by adding 20 million members since the beginning of 1998, Hotmail tripled its size in less than one year. The current sign-up rate for new memberships frequently totals more than 1 million per week, and 150,000 new users per day. No email service in history has reached such a large size or added members so rapidly.

The success of Hotmail speaks volumes about how email has become a critical communications tool in people’s lives, one that allows them to stay in touch with friends, family and colleagues from any Internet-enabled PC in the world, anytime and, in the case of Hotmail, entirely for free. In fact, more than 80 percent of Internet users regularly use email, making it the most popular online activity around the globe, according to a recent worldwide Internet study conducted by IntelliQuest Information Group, Inc. And the growth of the email market shows no signs of slowing.

Hotmail’s recipe for success is relatively simple. It delivers the qualities consumers really want in an e-mail service: speed, reliability, ease of use and a rich set of features. Hotmail member Jay Schorr of Miami, Fla., summed up Hotmail this way: “Hotmail has everything I need in one place. It’s fast, reliable and free.”

Other members, such as Tom Wagener of Munich, Germany, are attracted to Hotmail because it is Web-based. Said Wagener: “I’ve logged on from remote parts of Africa and Europe. I use Hotmail wherever I can find a computer with Internet access. It’s easy.”

Last October, these qualities convinced PC World Online to recognize Hotmail as the best Web-based email service. The magazine said while others provide similar services, “none can match Hotmail’s general ease of use.”

The Hotmail success story has only just begun. Hotmail’s membership in the MSN family of online services positions it for continued growth with new services, streamlined design, localized content and all the benefits of the portal.

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