Internet Marketing Small Business Advice

Hotmail eBusiness Model
www.hotmail.com

The lesson of Hotmail strikes at the very heart of why you will launch your internet presence -

How you would attract members (users) and build a company around it. Continue below.

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Although it is no longer popular vs. Yahoo mail, the free Hotmail service was such a hit at that time that it only took almost 30 months for it to attract 30 million users - much faster than CNN or AOL.

The success of Hotmail speaks volumes about how email has become a critical communications tool in people's lives, one that allows them to stay in touch with friends, family and colleagues from any Internet-enabled PC in the world, anytime and, in the case of Hotmail, entirely for free.

Hotmail's recipe for success is relatively simple. It delivers the qualities consumers really want in an e-mail service: speed, reliability, ease of use and a rich set of features.

This very popular model has been observed in many early Internet undertakings:

1. Provide a great free service,
2. Get all the users, and
3. Advertisers will follow.

In the case of Hotmail, buyers followed. It was bought by MSN (Microsoft). The founders, Sabeer Bhatia and Jack Smith, laughed their way to the bank.

Financial terms of the deal, other than the fact that it was a stock-swap transaction, were not disclosed, but one industry executive speculated that the value of the deal was as high as US$400 million.

The bursting of the Dot.com bubble around 1998-99 put a dampener to selling popular websites. However, Google just recently bought into Alibaba.com of China last year for US$1.6 billion.

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