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A Hotmail account is temporarily deactivated (all messages cleared, although not the address book) if the user abandons it for a month or more. It may even be permanently deleted eventually. Hotmail Plus customers (customers who pay for extra storage) are exempt from deactivation.

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.

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.