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August 27, 1998


Hotmail founder Sabeer Bhatia is star speaker

Priya Ganapati at Pragati Maidan

Email this story to a friend. Back to IIW coverage index. For the audience of more than 350 executives and entrepreneurs, the man in a dark blue suit on the stage represented the ultimate success story.

Sabeer Bhatia, the founder and CEO of Hotmail, is probably what every Indian entrepreneur would dream of being.

Not surprisingly, the audience is waiting anxiously to listen to his keynote address. And like the story of Hotmail, the session started with a few glitches. But once it was on, it was smooth running all the way.

The address was delayed by nearly 10 minutes because of a technical problem. Bhatia's 266 MMX Celeron powered computer had to be restarted as the mouse was not connected properly and so wouldn't work! The bug was fixed after consultation among the technical team and Bhatia.

"The Internet has been heralded as the greatest entrepreneurial opportunity. From a growth of less than one million users worldwide it has a base of nearly 90 million today."

 "The Internet is truly a global phenomenon because it is based on ubiquitous standards like IP, HTTP and HTML. Its widespread adoption dwarfs the adoption of any other technology. Television took nearly 10 years while the cable industry took about 13 years to achieve the kind of penetration we are seeing today. The Net has taken less than five years to do the same," Bhatia emphasised.

He admitted that more than 50 per cent of the usage comes from the US but that would change very soon. "Though the Internet has been around for more than 20 years, it really happened over the last five years. Five years ago Tim Berbers-Lee invented a graphical user interface called the Web that has made it easy to just point and click. It has transformed the Net," he recollected.

Bhatia came down strongly against any form of regulation over the Net. "The Internet has benefited from no rules. There has been no government intervention to constraint the growth," he emphasised.

He claimed that over the past five years the Net has created as much wealth as the PC industry did over the last 15 years. "This is because there was no government intervention. Today 9 out of 10 companies on the Net are in the US. And 9 out of 10 are in the Silicon Valley," he said.

"The society is becoming more information based. Seventy per cent of the households in the US have voice mail connection while the cell phone penetration is expected to increase from 36 per cent in 1998 to 62 per cent in 2002."

Bhatia felt that compared to these media email is more efficient, cheaper and easier to disseminate information to larger groups. "I process about 150 emails everyday. I don't think that it would be possible to do the same with voice mails," he pointed out.

A study has revealed than over 68 per cent of novice users use the Net for email. It is the utility driving the Net. There are 140 million email accounts today and this figure is expected to rise to 200 million by the end of 1998.

"Providing, say to use and simple Hotmail account is our objective," Bhatia reiterated.

"What differentiated Hotmail and helped it achieve the kind of popularity it has today is the fact that unlike other proprietary software based email system, Hotmail is browser based. This fact has been critical to our success. People are not confined to one computer nor do they have to install any software to access Hotmail," he elaborated.

Characterising the features of Hotmail, Bhatia said, "It provides universal access. It is independent from ISPs and the best of all, it is free."

Hotmail was founded in late 1995 and launched on the 4th of July 1996. Bhatia revealed the significance of the date and the name Hotmail. "4th of July is the Independence Day in America. We wanted our product to symbolise freedom. Hotmail used to earlier capitalise the letters 'h', 't', 't' and 'p' to show that it was based on the HTTP protocol. We dropped it because our marketing guys advised us that not many users would realise this."

Every single day Hotmail adds 100,000 new users. It is present in 230 countries and has 12 million unique logins per month.

Bhatia outlined the growth strategy for new businesses on the Net. The first step would be to build a subscriber base and provide low cost, ubiquitous and valuable service. Then the brand would have to be developed and enhanced. It is also important to deliver content in terms of personalisation and increased value to the consumer and create the proper distribution channels.

While Hotmail spends about $0.85 on every new subscriber, its nearest competitor, AOL, spends $20 on every subscriber.

Back to IIW coverage index. For the fascinated audience who hung on his every word and probably followed his every move he had the ultimate punch line "You ain't seen nothing yet".

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