How they do it: As one of the first webmail services, Hotmail was a pioneer in digitizing traditional postal communication. It enabled users to set up a virtual inbox and send and receive email messages using the internet.
How they do it: Hotmails basic inbox and email service was offered to customers for free. However, the inboxes came with limited storage for messages. Users could upgrade their storage by paying a monthly or annual fee.
How they do it: As Hotmail drove a lot of traffic on its website from its email users, it monetized that traffic with ads. These include sponsored articles, as well as display ads. The core product remained free to the user but Hotmail generated revenue from advertisers.
Leverage Customer Data
How they do it: Hotmail’s customer’s data was used by Hotmail to make a demografic profile of its users. This could be monetized by letting advertisers target their ads to specific demografic user groups and hence reach a higher conversion rate for their ads.