have a very large user base.
Livingston: Web-based email was so new to the world. What did consumers
misunderstand?
Bhatia: We had a sales guy who signed up his mom, and his mom said, “Yes, I
can see that there’s an email from you, but how do I read it?” And he said,
“Mom, go and click on it.” She didn’t know you had to click on it!
I heard another story from a man who said his sister would get into the
Hotmail account not directly by going to http://hotmail.com, but by going to
Yahoo, typing in the word “hotmail,” and then it would bring up the Hotmail
page and then she’d log in. And he’d say, “Why do you do it that way?” and the
sister would say, “My friend taught me this is how you get to Hotmail, so that’s
what I’ve been doing.” The usage patterns of how people used the Internet
were baffling to us.
Livingston: Who were you most nervous about from a competitive standpoint?
Bhatia: Anybody in the Internet space. We were most nervous about companies
like Netscape, because Netscape was building email servers and they
would provide web-based access to the servers. Their whole point was that they
provided web-based management to servers that you could set up. So, as system
administrators, you could check to see how many had people signed up or
whatever, but they were not offering web-based mail to people.
The good news was that a lot of people said, “I’m not sure email is a
browser-based product. Email is best done on an email client like Outlook
Express. It doesn’t belong in the browser.” That’s what Jerry Yang said at Yahoo.
We were like, “Great!” So we had no competition from them for the first 8
months or so, till we reached a certain point and then they had no choice but to
buy a company.
I heard that Yahoo gave up the opportunity to buy Google for $1,000,000—
that at one point, Google would have been happy to be sold to them for a million
bucks.
Livingston: Yahoo ultimately wound up buying Rocketmail. They were your
first real competitor, right? Tell me about them.
Bhatia: They were our partners. We needed to have a directory of users that
people could search and send email to. Instead of building our own directory,
we partnered with Rocketmail. We said, “OK, we’ll use your directory on our
website and we’ll send you our registration data so you could register these people’s
email accounts.” We didn’t want to build a directory just for people to
search for email. All they had was a directory, that’s what they specialized in,
that was their business.
They found out how many registrations we were sending them daily—they