How Sabeer Bhatia started Hotmail on $300,000 and sold it two years later for $400 million | Hacker News Reader

How Sabeer Bhatia started Hotmail on $300,000 and sold it two years later for $400 million

wired.com

34 pointsRod14 comments

Interesting to read this in the historical context (1998). e.g. ... and with Microsoft's financial muscle, Hotmail's juggernaut appears unstoppable.

Thanks for that.

I was wondering when this was written specifically because of that sentence. Yahoo mail is so far ahead everyone else today that I knew this had to have been written long ago.

Does anyone know how Yahoo mail caught up to and surpassed Hotmail?

For the most part, Yahoo started out as "personalized start page," like Excite and a few others. They had, and still might have, far more people using any one Yahoo service than Microsoft had using whatever it is they had back then (I'm not even sure they had MSN).

Anyway, all Yahoo had to do was make mail, then their millions of users would automatically get e-mail accounts. From there, it probably spread just the same way as Hotmail.. your-name@yahoo.com, and a little message at the bottom of each e-mail: "get your own email at yahoomail.com"

What's amazing is that it took 6 months for a competitor to come in.

Yahoo Mail was the result of acquiring Four11 and rebranding their RocketMail product. It was one of Yahoo's better acquisitions. For $65M they got a product that now earns $6.5B/year.

Yahoo's total revenue for last year was around 7 billion, and their net income was 400 million. The company has a total market cap of 17 billion, so Yahoo Mail earning 6.5 billion a year by itself seems inaccurate.

So says Wikipedia:

  http://en.wikipedia.org/wiki/Yahoo!_Mail

but you're right, it can't be that much.

See _Founders_At_Work_ pp. 17-29, if you're interested in a longer version.

Nudist On The Lateshift is a great book by Po Bronson about the making and selling of Hotmail. It was pretty inspirational for me.

The book is not exclusively about the making and selling of Hotmail. It's a collection of short vignettes about Silicon valley in the 90s.

Po Bronson's "What to do with your life" is a great read.

This article though seems to be full of fluff and about reading too much based on post-facto news. Sabeer is definitely smart, but he also definitely got incredibly lucky, and a lot more than everyone else who is as smart or smarter.

Nice article, even though I think that too much emphasis was on "having the right idea" rather than on execution and timing. http://titocosta.tumblr.com/post/81087622/ideas-are-overrate...

I wonder what it is valued at today?

If you were to buy it now, you'd not be purchasing the nearly exclusively rights to "e-mail" as it was back then. People would actually say: "Send me a Hotmail." What made it valuable to Microsoft was they they got to capitalize off of the leverage over the largest user-base of any online product of that time. With it they kickstarted MSN.

Today, Hotmail probably pulls in quite a bit of revenue from advertisements, but most of it's value was "spent" by herding the massive group of users into other products, which may or may not have made MS more money.

I think Twitter is today's version of Hotmail, in terms of the concept... except Twitter seems to have gotten much luckier.

What this ingrains into my head is: give access to known technology in easy ways. Hotmail, Blogger, Wordpress, Twitter, Facebook -- they allow people to publish/share information where previously they'd need expertise in IT to do it.

in other words, it would probably be worth the same 400 millions from 10 years ago? :-)

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