Hotmail – the rise, fall and move to

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Once one of the most popular e-mail services on the web, Hotmail – officially at least – no longer exists. Still perhaps the most widely recognised platform for sending and receiving mails online, Microsoft have tried to centralise their operations, leading to the fall of one of the first great portals of the web.

Launch and Rise

At a time when it was still quite common for companies to charge for users to have an e-mail addresses, Hotmail was founded in 1996 by Sabeer Bhatia and Jack Smith as a free service for all clients. Their main competitor at the time was RocketMail – the forerunner to Yahoo! Mail, still a competitor today). The name, bizarrely, was chosen as Hotmail could be condensed to HTML (and was originally stylised at HoTMaiL), and the company launched with a 2mb limit on users inboxes – a relatively huge amount considered that dial-up internet connection speeds meant that the sending of images or other large files was prohibitive.

Sale to Microsoft and the creation of MSN Hotmail

Having amassed a reported 8.5million subscribers from across the globe, interest in the webmail company quickly started to build, and the business was sold to Microsoft in December 1997 for a reported $400 million. This was one of the first moves the Bill Gates founded company have made to subsume businesses in industries that they have looked to go into – preferring to purchase an already successful company rather than start their own competitor for scratch.

Reasons for success

Part of the reason behind the success of the company was their localised versions of the site for different regions around the globe – whereas competitors traditionally focused on the US market, Hotmail was keen to engage with the growing base of users connecting to the internet in other parts of the globe. By 1998,  it was the internet’s largest e-mail client, claiming a base of around 30 million active Hotmail users.

There are also those who say Hotmail offered one of the first proper routes for a generation that still weren’t tech-savvy to make their first steps online. The simplicity of starting a Hotmail account, and the ability to quickly and easily send mails – at a time when setting up an Outlook account was the matter of many How-To guides in magazines and many internet service providers placed strict limits on the amount of e-mail accounts each user could have, Hotmail provided a freedom that simply wasn’t there from other services. Add to that a relatively light webpage that allowed clients on even the slowest modem to swiftly check their inbox, and it is clear why Hotmail was the market leader.

Windows Live Hotmail

In what many analysts have seen as the first real dilution of the brand – and part of the reason for it’s eventual downfall – Microsoft announced that the name would be changed once more from MSN Hotmail to Windows Live Hotmail in 2005. Despite complaints from those that had grown up with the brand, Microsoft stuck through with their plan – in part due to the new Google mail service GMail that was launched in 2005.

A typical Windows Live Hotmail account layout

A typical Windows Live Hotmail account layout

Security issues

Part of the marketing behind GMail was the higher levels of security it would provide compared to Yahoo! Mail and Hotmail. Hotmail themselves had experienced various problems with security – the first of which came in 1999, when it was revealed by hackers that anyone could log-in to any Hotmail account by simply using the password ‘eh’. Since then, Microsoft had been fighting an uphill battle to convince the public of the safety of their service. Between 2001 and 2003, millions of Hotmail accounts has been exposed to tampering by hackers, who had run riot on the service – leading to many thousands of complaints from customers whose privacy had been compromised.


Despite winning a variety of awards for its upgraded service as Windows Live Mail, the company struggled to gain bakc lost confidence, as customs flocked to join Google’s Gmail web service. With a cleaner look and simpler interface, users had a lot less to complain about with GMail – especially considering the massive amount of extra storage the service offered.

Despite various upgrades to the service, Microsoft eventually admitted defeat with their Windows Live Hotmail service in 2012.

Move to

First brought in as a beta version in July 2012, has since become the standard e-mail client for Microsoft, with users attempting to access instead directed to the new homepage. Users of Hotmail have been forcibly transitioned to Outlook, with new users unable to select as their preferred email server, instead having to select This has caused some unrest among die-hard Hotmail users, who are unhappy at the treatment of a company that truly represents one of the turning points in the history of the web.

Microsoft, however, are keen to unify their branding – following the various attempts to complicate the naming of their brands in the middle of the last decade, they have opted for a simpler, sleeker approach, especially as competition from Apple has heated up. They believe is a stronger brand – and are probably correct, given the amount of watering down Hotmail has gone through over the years.

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