Wednesday, 6 June 2012

Hotmail: a successful Viral Marketing

We may have forgotten about a lot of things of the past, but never our first email ID. I don’t know about you guys but my first mail id when I was six was at Hotmail, which happened to be one of the most trending topics in the world. Today if you see the design they had back then I’m sure most of you would puke, but when I first saw it I felt that it was the most exciting things in the world.
Hotmail was born on July 4th, 1996 – the creation of a Silicon Valley startup founded by Sabeer Bhatia and Jack Smith. It was one of the very first services to offer free web-based e-mail. Originally, Hotmail was spelled “HoTMaiL,” emphasizing its use of HTML for the web user interface. Hotmail became popular quickly, and by the end of 1997 already had millions of customers. Hotmail was acquired by Microsoft late in 1997 and was later integrated with another acquisition –  the web-based calendar service, Jump. Hotmail continued to grow very quickly – reaching tens of millions of users in just a few years. Today, Hotmail has provisioned well over a billion inboxes and has several hundred million active users around the world.
Hotmail logo history
Hotmail life cycle 
Leave that aside, for now one thing that matters is how did Hotmail build a user base of 12,000,000 in just a year before being acquired by Microsoft. First thing is that they had a particular advantage as they were one of the first to provide free email services to the masses, so they were pretty popular on televisions, newspapers and other communication channels of the twentieth century, but that was not enough to gain over 12,000,000 users.

So the initial popularity of the service successfully gave it around 500,000 users in the first year, and so the reason for its 500% growth rate in a year was a simple strategy which would take others years to think about. What hotmail did was put a small signature below all outgoing mails which recommended the users in the receiving end to sign up for hotmail. This was a very simple tactic but was very successful.
They did not need any high cost banner advertising or a television commercial and the only thing this costed them was a few pennies as bandwidth. One lesson we can learn here is viral marketing works only if you have an existing audience in place, you cannot take your business or blog viral if you lack the initial users or customers. Hotmail did it well, they successful got their first few users and triggered a viral chain using them.

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