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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.

While Hotmail does not have POP3 email access, it is possible to check your email using Microsoft Outlook and Outlook Express on PC and Microsoft Entourage on Mac, using the WebDAV protocol. While this service was free for a number of years, Microsoft announced on September 27, 2004 that they were making it a subscription-only service for new users immediately and existing users from April 2005. However, users can get around this restriction using FreePOPs 1, a flexible free software application that allows email client access to webmail services through POP3.

In December 2004, Microsoft started its new blogging service (beta) called MSN Spaces and integrated it with MSN Messenger and Hotmail.