Microsoft Acquires Hotmail
Dec. 31, 1997
The Microsoft Network Adds Hotmail's Browser-Based Free E-Mail Technology To Its Family of Internet Services

REDMOND, Wash., Dec. 31, 1997 — Microsoft Corp. today announced it has acquired Hotmail, the award-winning free Web-based e-mail service. Hotmail will become an important component of The Microsoft Network of online communication and information services that Microsoft offers free to all Internet users; it includes sites for news, travel, investment, car buying, games, computing and shopping.

"Hotmail has been a Web-mail pioneer," said Laura Jennings, vice president, The Microsoft Network. "It has built a strong following by offering a free, high-quality e-mail service that lets its members access a permanent e-mail address from any PC with an Internet connection.

"Our goal is to combine the benefits of Hotmail with Microsoft® services and technology to provide consumers the best combination of free and premium e-mail services," she said. "We are committed to making it even easier for people to communicate over the Internet from anywhere in the world."

"We're very proud of the business we've built and are gratified by consumer acceptance of our service and our technology," said Sabeer Bhatia, president, chief executive officer and co-founder of Hotmail Corp. "We look forward to working with Microsoft on ways we can expand free e-mail services on the Web and bring new features to consumers even more quickly."

The Hotmail web-centric e-mail service complements Microsoft's existing family of
e-mail and collaboration clients. These include Outlook ™ Express, the award-winning free e-mail and newsreader client for consumer and home users; the Microsoft Outlook messaging and collaboration client, the premier client for business users that integrates Internet-based e-mail with scheduling, task and contact management features; and Microsoft Exchange Server, the Internet standard-based messaging and collaboration server for businesses of all sizes.

In addition to providing a free e-mail service, Hotmail will in the future allow members of MSN ™ Premier to check their MSN e-mail from anywhere through a Hotmail account. Hotmail enables members to retrieve e-mail from up to four POP3 e-mail accounts via any PC connected to the Internet.

Hotmail will continue its operations in Sunnyvale, Calif., as a wholly owned subsidiary of Microsoft reporting to Jennings. Financial terms of the transaction were not disclosed.

About Hotmail

Hotmail provides globally accessible, free Web-based electronic mail to more than 9 million members worldwide. Its service was recently included on PC Computing's coveted "A List" as the best in Web-based e-mail and received CNET's highest ratings in all categories for free Web-based e-mail. The Hotmail product is a password-protected, feature-rich e-mail system that offers advanced capabilities including instant mail delivery, MIME and UUENCODE file attachments, personal address books, spell-checking, filtering and embedded hyperlinks. Because Hotmail is Web-based, members can send, view and navigate entire Web pages within a Hotmail message.

A Hotmail address operates independent of a consumer's Internet access provider, geographic address, or place of employment, which means members can change ISPs or jobs or even move to a different country and still access their Hotmail account from any Web-connected device. Advertising banners similar to those seen on other Web sites support Hotmail. Hotmail is also a leading advocate of anti-spam measures in the e-mail industry. Consumers can sign up for a Hotmail e-mail account at http://www.hotmail.com/ .

About The Microsoft Network

The Microsoft Network of online services makes it easy for consumers to harness the power of the Internet to lead more informed, more fun and more productive lives. MSN combines a comprehensive set of core Internet services, including e-mail, online forums and communities, and content and services programming, with direct access to leading Microsoft sites for news, travel, investment, car buying, games and entertainment. Specific programming and services available on MSN include the Microsoft Encarta® multimedia encyclopedia, the Expedia.com travel service, Disney's Daily Blast SM and Family.com SM , the Slate® online magazine, the CarPoint Ô online automotive service, the Microsoft Investor online investing service, and up-to-date news and information from MSNBC News. The MSN home page can be reached at http://www.MSN.com/ . Additional information for the press is available at http://press.MSN.com/ .

Founded in 1975, Microsoft (NASDAQ "MSFT" ) is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

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Microsoft, MSN, Outlook, Encarta, Expedia, Slate and CarPoint are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

Daily Blast and Family.com are service marks of Disney Online.

The Microsoft Network is operated by Microsoft Corp. on behalf of Microsoft Network LLC.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass/ on Microsoft's corporate information pages.

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