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Until May 10 2005 the special feature of including dots in the email address wasn't available, but with growing competition from other free email providers like Gmail and Yahoo, this feature made available to users.

Hotmail was backed by the venture capital firm Draper Fisher Jurvetson and was later sold to Microsoft corporation, which rebranded it under its MSN umbrella. By December 1997, Hotmail reported more than 8.5 million subscribers. [1] By February 1999 it reported more than 30 million active members. [2] Hotmail serves e-mail accounts in many countries. Hotmail is currently the largest webmail provider.

Jack Smith first had the idea of accessing e-mail via the web from a computer anywhere in the world. When Sabeer Bhatia came up with the business plan for the mail service, he tried all kinds of names ending in 'mail' and finally settled for hotmail as it included the letters "HTML" - the markup language used to write web pages. It was initially referred to as HoTMaiL with selective upper casing.