Mahkameh Yaghmaie Tannaz Alinaghi 9/19/ Hotmail

 History  The founders  The concept  The capital  The beginning  The growth  The competitors  Options  Solution 9/19/ Hotmail

 Founders (colleague)  Sabeer Bhatia  Jack smith  Initial goal  Web-based DB: JavaSoft 9/19/ Hotmail

 Full time workers  The need to set aside some extra hours outside the workday  Difficulties in communication  Web was just a directory of information  The idea of a web-based communication tool 9/19/ Hotmail

 No ISP or provider subscription  Free service  Revenue model based on marketing  Provide access to subscribers  Track subscribers’ surfing habits  Allow advertisers to customize advertising information 9/19/ Hotmail

 December 1995  Venture capital firm of Draper Fisher Jurvetson (DFJ)  For the purpose of selling a web-based DB  DFJ happened to like the idea more  DFJ granted $300,000 for 15% of the company 9/19/ Hotmail

 DFJ started viral marketing for HotMail  Viral marketing happens when users of a service or product advertise the service or product by simply using it  In hotmail, a message ends with an advertisement directing the recipients to the hotmail registration site  This is not junk-  It is not very different from a banner ad 9/19/ Hotmail

 Initial marketplaces  Consumer market  Corporate market  Packaged web product with Hotmail’s software  Bhatia decided to focus on the first marketplace 9/19/ Hotmail

 Salaries and stock options were used to attract employees  “My greatest accomplishment was not to build the company, but to convince people that this is their company. I showed people how this would ultimately benefit them.... We initiated the avalanche.” 9/19/ Hotmail

 Launch  100 subscribers in the first hour  100,000 subscribers in a month  1 million in less than six months 9/19/ Hotmail

 Growth issues:  Intermittent service outages  Junk mails  Solutions  Never restricted number of users unlike Juno  Implemented a new, highly scalable and redundant architecture  Able to sustain more than 50,000 new users a day  Provided filters for users  Automatic control on the mailing behavior of the users 9/19/ Hotmail

 “We’re particularly excited about the load balancing design of this architecture, When [users log] on to Hotmail, they get the least busy path to their , which dramatically enhances their online experience. 9/19/ Hotmail

 In 1997  over 5 million subscribers  Second largest provider after AOL  Competitive advantages  No need to subscribe for a special internet access  Revenue model based on advertising  Geographic expansion  No limit on the number of new subscribers  Easy to subscribe 9/19/ Hotmail

 Hotmail options  Merge with a large portal like MSN Microsoft lacked a free web-based service  Go public Huge competitors like AOL and CompuServe with a huge capital  Remain private Juno and USA.net continued to thrive 9/19/ Hotmail

 For company survival  Develop partnership Or  Risk giving away potential profits to the competitors  Accept Microsoft Offer for partnership 9/19/ Hotmail

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