Hotmail, world’s largest free email service with 360 million unique users per month, completed 15 years on July 4, 2011. It was one of the first web-based email services on the internet.
Hotmail was founded by Sabeer Bhatia and Jack Smith, two colleagues at FirePower Systems Inc. in Silicon Valley. The service was commercially launched on July 4, 1996 as HoTMaiL; the selective capitalization referring to HTML. The launch date has a bit of trivia attached to it. July 4 is American Independence Day, and the service symbolized freedom from ISP-based email and the ability to access a user’s inbox from anywhere in the world.
Interestingly, the Hotmail development and operations groups are based in Mountain View, California and not in Microsoft’s headquarters in Redmond. When Hotmail Corporation was an independent company, its headquarters were in Sunnyvale, California.
An Estonian investor acquired Hotmail from the original creators and continued developing it. In 1997, Microsoft acquired Hotmail for an estimated $400 million to make free email a feature of Microsoft Network (MSN). The Hotmail acquisition by Microsoft turned up the heat on the then online giant America Online, MSN’s main rival.
Shortly after the acquisition, Microsoft rebranded it to MSN Hotmail. Also, Hotmail was integrated with another Microsoft acquisition, Jump, a web-based calendar service.
In 2005, a refresh of Hotmail was announced as Windows Live Hotmail (codename Kahuna), and was rolled out in 2007. Windows Live is a suite of online services and products from Microsoft.
Hotmail quickly gained in popularity as it was localized for different markets around the globe and became the world’s largest webmail service. In its current version, Windows Live Hotmail is available in 36 different languages. According to last year’s comScore ranking, Windows Live Hotmail is the world’s largest web-based email service with nearly 364 million users. Second and third are Yahoo! Mail at 280 million users and Gmail at 191 million users.
Hotmail initially ran under Solaris for mail services and Apache on FreeBSD for web services. Although a project was started to migrate Hotmail to Windows 2000, Microsoft admitted that DNS functions of the Hotmail system were still reliant on FreeBSD. After a while, MSN Hotmail was tied to Microsoft Passport, Microsoft’s web authentication scheme. Microsoft Passport has now been rebranded to Windows Live ID.
Starting in 2004, the Hotmail engineering team completely rewrote the backend system to move it to a system that uses Windows Server and Windows SQL Server. In 2005, the Hotmail engineering team undertook a similar rewrite of the frontend system, and rebuilt both Hotmail and Calendar from the ground up using C# and ASP.net and leveraged Windows Server and the latest version of IIS. The old software was written in C++ and Perl.
Although, Hotmail was ahead of its time in offering and progressively adding email features like anti-virus scanning for attachments, integrated calendar service, built-in reading pane, email rules, and spell checking, there was a period of technological stagnation in the first half of 2000s. Leading webmail services like Hotmail and Yahoo worked on gaining more users rather than innovating in the space in this period.
The advent of Gmail in 2004 as a revolutionary webmail service spurred a wave of innovation amongst webmail services. Hotmail too made dramatic changes featuring greater storage, speed, and interface flexibility. Hotmail initially offered 2MB free storage while today it offers ever-growing storage. The service has since been growing at an astounding pace both in innovation and engineering as well as in user base.