Hotmail, A web-based free e-mail provider, is a super cool company in the red hot internet sector. No wonder Microsoft gobbled up this starpup as an adjunct to its Microsoft Network to bolster its internet ambitions.
Hotmail will become a potent weapon in Microsoft's arsenal to limit the expansion of other on-line services and to emerge as the leading player in the internet sweep stakes. Analysts rank Hotmail right up there among the lines of Netscape, AOL, and Yahoo as company with the right concept at the right time. According to industry analysts, Microsoft paid top dollors for the company to ensure that Hotmail does not emerge as a thorn in the internet e-mail arena as Netscape has become in the browser field. Analyst speculate the deal to be around $400-500 million creating in its wake a host of millionaires.
Sabeer Bhatia, the President and CEO of Hotmail is coy about the specifics of the deal.
Commenting on the rationale for merging with Microsoft rather than strike an independent course.
Bhatia said, "The competitive landscape in Web based e-mail service is changing rapidly and
there is lot of consolidation taking place. Instead of pushing an independent course, we can now
leverage the resources of Microsoft and expand the horizons of the company."
Sabeer Bhatia, a graduate of Stanford, worked for Apple Computer, and then a start-up company, FirePower Systems, before starting Hotmail in late 1995. The company was funded by Draper, Fisher Associates, and Menlo Ventures.
Since its inception as a brailnchild of two young computor engineers - Sabeer Bhatia and Jack Smith - Hotmail blazed a new trail as one of the fastest growing and one of the most popular web- based businesses.
Sabeer Bhatia is perhaps one of the youngest entreprenuers to strike it rich and strike it big. His share of the acquition price is rumered to be in the tens of millions of dollors. Born in Chandigarh and brought up in Bangalore, Bhatia studied in Birla Institute of Technology for two years before transferring to Caltech in Pasadena, California. He completed an undergraduate degree from Caltech in electrical Engineering and then went on to do his masters in the same field from Stanford University.
He spent a year as a systems engineer at Apple Computer before moving to a startup firm - FirePower Systems. While he was working at FirePower, Bhatia had thought of starting his own company in the true Silicon Velly tradition. "This valley is a land of opportunities and this the place where legends are created every day. I wanted to start a company of my own and pursue some of my dreams," said Bhatia.
Bhatia and his partner, Jack Smith, toyed with the idea of a web-based database server and tried to interest venture capitalists in their first venture, JavaSoft. However, realising that the response was lukewarm, Bhatia and Smith were looking for another idea when they hit upon a web-based e-mail server rather than a database server.
The company had all the right ingredients for becoming a success. Given that "free" is the way to go on the internet, Hotmail met the very first requirement of becoming a hot success story. Secondly the global nature of the service meant that irrespective of which internet provider the user logs on to, one could access one's e-mail from their Hotmail e-mail address.
"Internet was a level playing field where young entrepreneurs could implement their vision and realise their dreams and hence it was logical for us to consider a web-based business. Further, a global platform and pubice nerwork like the web offers as opportunity to venture beyond the limitations imposed by a primary network," said Bhatia.
Presently, Hotmail has around 10 million subscribers and is growing repidly. Even though the original business model was based on an advertising-driven paradigm, the company is emerging as a prime distribution channel in the field of electronic commerce. After the merger, Bhatia's role is as the general manager of Hotmail, a wholly owned subsidiary of Microsoft. Still unmarried (making him perhaps the most eligible Indian-American bachelor) Bhatia enjoys tennis, golf, and sking.
He considers leadership, providing a vision, and perseverance as his key strenghts. As far the future, Bhatia said he would be happy to realize his dreams within Microsoft. Also he indicated that he may help other young entrepreneurs as he has been through the entire nightmare of starting and succeeding at a startup.
With Microsoft's resources behing it, Hotmail is set to scale new peaks and emerge as a global leader among web-based e-mail providers. And now Bill Gates has become the provider of choice for your e-mail.
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 NRI News |