Hotmail Turns Three: Still the Leader After All These Years

REDMOND, Wash., July 9, 1999 — In July 1996, when the Macarena dance craze was sweeping the planet and “Independence Day” was filling movie theaters, Sabeer Bhatia and Jack Smith quietly changed the Web. On July 4, 1996, Bhatia, Smith and the rest of their team flipped some switches in their Silicon Valley office and brought Hotmail online for the first time.

Three years later, MSN Hotmail has become an indelible part of the Internet. With more than 40 million users worldwide, and a host of imitators launching similar services nearly every day, Hotmail has proved what Bhatia and Smith first envisioned in late 1995: that free, Web-based email would be one of the most important Internet innovations.

As of December 1998, 25 percent of all email accounts were free, Web-based accounts, according to a report by the Electronic Mail and Messaging Systems (connect time charges may apply. That’s an amazing accomplishment for an industry that had existed for less than 30 months when the study was released.

With more than 40 million members, Hotmail is the world’s largest email service. And while Hotmail has made some changes, including an update to its user interface in July and the addition of Japanese, German and French versions in April, the founders’ basic dream of making e-mail accessible and easy to use for everyone on the Internet has not changed.

“Hotmail remains popular because the essential elements that Sabeer and Jack put in place — an account that would be fast, easy to use, reliable, and accessible from any Internet-connected terminal — is still our vision,” said Hotmail General Manager for Development Don Bradford. “We may add or update features, such as the new user interface we debuted earlier this month. Changes are made usually at the request of our users and only after we determine that they will not have an adverse effect on the three criteria our members have told us are most important: speed, ease of use and reliability.”

The rapid growth of Hotmail has been challenging. Any service that goes from zero to more than 40 million users in less than three years is bound to experience growing pains.

But Hotmail has navigated this astounding growth well. The initial architecture implemented by the founders has proved extraordinarily scalable, according to Hotmail engineers. As capacity grows, Hotmail is able to easily implement additional hardware. While the service has experienced slowdowns and occasional outages — something many sites of its size have dealt with in the past — Hotmail’s problems are usually short-lived and affect only a small percentage of its members.

“Hotmail has scaled extremely well for a site of its size,” said Rex Smith, Hotmail’s General Manager for Operations. “Bandwidth has been a problem in the past, but it isn’t any longer. We have multiple bandwidth providers, which is good business when you’re as big as we are. In addition, our system is set up so that we can add servers and routers.”

In order to maintain growth, Hotmail has consistently paid attention to the features its members find most important. According to a recent internal study, those features are reliability, speed and ease of use.

“It has everything I need,” said member Jay Schorr. “It’s free, fast and reliable.”

It’s no surprise that Hotmail has inspired imitators. New sites appear almost every day with a similar set of features and the promise of free, reliable service. Many of these services have had some success, while others have been a flash in the pan. But none have become as popular as Hotmail. Hotmail’s current membership is larger than the population of all but 26 of the world’s 227 countries.

“I did a Web search on free e-mail services,” said member Stephen Robison. “A ton of them popped up. I linked into a few and I noticed some of them copied Hotmail features. So I just stayed with Hotmail. I saw them paying attention to improving. It works. If it didn’t work, I wouldn’t use it.”

The most intriguing new Hotmail feature is the new user interface, the first major redesign on the service’s history. The goal, according to Hotmail designers, was to provide a faster and more intuitive experience. Highlights of the redesign, which debuted July 8, include an all-new navigation scheme that provides members with faster, easier access to Hotmail tools, more on-screen work space for reading and composing messages, and an easier interface for features such as QuickList addresses, Find Message and Reminders. The slim, high-performance design also eliminates HTML frames and high-resolution graphics, dramatically decreasing loading times.

Anti-spam efforts have always been essential to Hotmail. The service has implemented multiple blocking features to fight spam, taken on spammers in court and supported strong anti-spam legislation to fight junk e-mail. Since Jan. 1, 1998, Hotmail has successfully petitioned the courts eight times for injunctions against spammers who have forged the Hotmail domain name.

In recent months, the Hotmail fight against spam has become more vigorous. Hotmail Director of Operations Services Randy Delucchi, who colorfully refers to stopping spammers as “putting heads on a fence post,” was named to the board of CAUCE (the Coalition Against Unsolicited Commercial E-mail) in April. In addition, Delucchi’s team recently implemented a new clause in the Hotmail terms of service, which demands restitution of $5 per e-mail message for anyone discovered using the Hotmail service in connection with the transmission of spam.

“I don’t get any junk mail at all,” member Anthony Esposito said. “It’s only the people who I want to get email from that get into my account.”

With a new face, three new languages and new members signing up each day, Hotmail continues to lead the industry it created three years ago. Undoubtedly, there will be more changes as the service adjusts to satisfy its growing membership. But the original vision will remain the same.

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