4 July 1996: Hotmail declares independence from your ISP
Hotmail launched on Independence Day, offering free email you could read from any web browser. Every message it sent carried a small invitation to sign up, an early and very effective piece of viral marketing. Users piled in by the millions, and Microsoft bought the company the following year for a price widely reported at around $400 million. Free, simple and spreading by itself turned out to be a powerful business model.
The lesson: When customers do your marketing for you, growth can be astonishingly cheap and astonishingly fast.
What it meant for investors
$1,000 in Microsoft at the start of 2000 → $12,000 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2000, the first year in our price data after the event. That is 12.0 times the money, and $7,374 more than a plain index fund made over the same years.
What Microsoft teaches: A great business bought at a silly price can still deliver a lost decade; Microsoft's profits grew for years while its 2000 valuation slowly deflated.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2000 | $40.00 | $12,000 | $4,626 |
| 2003 | $20.00 | $24,000 | $7,727 |
| 2005 | $27.00 | $17,778 | $5,763 |
green = beat the S&P 500 · red = lost money
What if you bought Microsoft? Every starting year and the full story →
More Microsoft history
- 30 January 2007: Windows Vista launches to consumers
- 13 March 1986: Microsoft goes public
- 4 April 1975: Microsoft is founded in Albuquerque
- 25 April 2019: Microsoft reaches a $1 trillion market value
- 27 June 2008: Bill Gates' last day as a full-time Microsoft employee
- 12 July 2006: EU fines Microsoft for dragging its feet
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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