Company History 2: Hotmail

When co-workers Sabeer Bhatia and Jack Smith began working on their first startup idea—a web-based personal database they called JavaSoft—they were frustrated because their employer’s firewall prevented them from accessing their personal email accounts. To solve their dilemma, they came up with the idea of email accounts that could be accessed anonymously through a web browser. This thought became the startup. In 1996, the first web-based email was born, offering people free email accounts that could be accessed from any computer with an Internet connection. Less than 2 years later, they had grown Hotmail’s user base faster than any media company in history. On New Year’s Eve, 1997, Microsoft acquired Hotmail for $400 million.