Hotmail

The founder

Sabeer Bhatia, an Indian immigrant engineer, co-founded Hotmail with Jack Smith in 1996, launching the service on July 4th — the date chosen symbolically for "freedom" from ISP-tied email. Within 18 months, Hotmail grew to roughly 8.5–10 million users, making it the largest webmail service in the world. Microsoft acquired the company on Bhatia’s 29th birthday; he stayed on for about a year before leaving to found Arzoo Inc. in 1999.

How it was sold

Microsoft folded Hotmail into MSN as "MSN Hotmail" to gain an instant foothold in web-based email and a huge existing user base. Reported negotiations ranged from an initial Microsoft offer near $140 million to a founder counter near $750 million, settling at a widely-reported (though never officially confirmed) figure of roughly $400 million in Microsoft stock.