Microsoft and Hotmail Case Study

Contents

1. Introduction 2

Microsoft 2

Hotmail and the founder - Sabeer Bhatia 2

2. Background. 3

Overview situation 3

Subjects negotiations 3

The interests of the parties 3

3. Negotiation process 3

The first time: Direct meeting at Hotmail headquater 3

The second time: On the phone 4

The third time: Direct meeting at Bill Gates’s House 4

The fourth time: Decision 4

Factors affecting to the negotiations 4

4. Tactics and strategies used in negotiations 5

5. Results of the negotiations and lesson 5

1. Introduction

In many famous negotiations, Microsoft and Hotmail is one of the most impressive acquisitions in US. After being acquired, Hotmail is considered a popular free webmail service of Microsoft, part of the Windows Live services group. Hotmail combined many features to help user like music player, change the color follow their choice, integration with other applications of Microsoft. Moreover, Hotmail had become a reliable tool for technology users in that period.

However, to achieve this success, Microsoft had to go through a difficult period to negotiate with the founder of Hotmail. That negotiation had a great significance for Microsoft and others. This report will show how Microsoft and Hotmail negotiate to get success.

Microsoft

Microsoft is an American multinational technology company headquartered in Redmond, Washington. They develop manufactures, licenses, supports and sells computer software, consumer electronics and personal computers and services. Microsoft was founded by Bill Gates and Paul Allen on April 4, 1975.

Microsoft's mission is to help individuals and businesses throughout the world realize their potential. That mission demonstrated the core values of the brand: integrity, honesty; wholeheartedly with customers, partners and technology; open and respectful; confront and conquer challenges; ... self-improvement. These values represent human values of the brand in the business and its responsibility to the community. Members rely on intelligence and creativity in the company, Microsoft is confident that the mission can be completed.

In 2012, Microsoft dominates the market both PC operating system and office suite. Companies produce in large scale with software for desktops and servers, operating in the field of online search (Bing), participated in the video game industry, some markets engineering services (MSN), and mobile phone (with the Windows phone operating system).

Today, Microsoft is presenting worldwide. Microsoft has set up branches in more than 90 countries and are classified into 6 areas

Hotmail and the founder - Sabeer Bhatia

Sabeer Bhatia was born on December 30, 1968 in India who has a passion for computers since childhood. After graduating in engineering, he went on a foreign transfer from BITS to complete his Masters in Stanford University. Unlike most of the engineering graduates who fly to the United States with the sole dream of settling down with a job, a condo and a dog, Sabeer looked beyond. He thought about the usability of technology in the mankind’s everyday life. During his stint working as hardware engineer for Apple Inc. Sabeer understood the premise of the emergence of the new world. He was astonished as to how much a web browser could help; enabling people access the internet with a difference. 4 years after graduation, he and a close friend Jack Smith do hardware engineer for Apple.

December 1995, Jack Smith was on the road driving to home, he suddenly had the idea of building a free e-mail, everyone can use. Jack Smith called for Bhatia to talks about the idea. To turn that idea into reality, Bhatia and Smith resigned from Apple, opened a small company in Fremont, California. Bhatia has convinced a lot of companies to invest in this idea, but without success. Finally, investors Seve Jurvertson agreed funding $ 300,000 for this project with condition that Steve was the ownership of 15% shares of the company. Bhatia also persuaded 15 newly hired employees had word unpaid, in exchange for the latter they will be buying shares of the company with cheap price.

July 4, 1996 Hotmail was officially launched. With Hotmail, user do not need a private computer, anyone who uses a computer anywhere in the world can enter their own mailbox on the internet, receive and send messages for free.

The creation of Hotmail brings buzz in the field of information technology at that time. 6 months after its establishment, Hotmail had 6 million registered users and quickly became familiar tools.

2. Background:

Overview situation

In the early 90s of the 20th century was a time when the information technology sector strongest growth. Microsoft Corporation was founded by Bill Gates is one of the largest technology corporations in the world with billions of dollars of revenue. However, Microsoft is still facing many difficulties with the competition, the competitors of Microsoft such as Yahoo, AOL, Netsscape, Oracle, Linux is the company launched earlier than Microsoft, experience and advanced technology while Microsoft only be appreciated in the array of Windows software. But, their biggest weakness is a free email service Windows, their customers often complain about email services difficult to use, often crashes, error fonts, getting email done only on one machine have been registered Internet Services Provider is very inconvenient for the user. Meanwhile, E-mail application of Netsscape very easy to use and many people are using it, although it was charging.

During this time, the service Hotmail launched by Bhatia and Smith user numbers increasing every day, Microsoft Corporation have decided to acquire Hotmail service.

Subjects negotiations

The buyer is Microsoft, the seller is Hotmail. Microsoft Corp. negotiations become the owner of the service, and they will be integrated Hotmail into