After a few years at Apple, Bhatia worked for Firepower Systems for two years, while tinkering on his own with ideas related to the internet and the increasing opportunities there. He and Jack Smith, a former Apple colleague, worked together on Javasoft, a web-based database that made them aware of the potential benefits of a web-based email system that wouldn't require a separate client or reside on any particular machine. Hotmail was not provided by any ISP or educational institution, and therefore your email address wouldn't change if you moved, graduated, or changed jobs -- the mail was stored online, and you could read it from any online computer -- and it required no special software. Like many early web ventures, Hotmail -- a name derived from the web's markup language HTML -- was free to use, with revenues generated from ad sales. The service launched on the Fourth of July, 1996.
By the end of the year, Hotmail had one million subscribers. The following year, Microsoft bought the company -- which had been started with a $300,000 investment only eighteen months earlier -- for $400 million. Bhatia took a job with Microsoft until April 1999, when he started Arzoo Inc., which didn't survive the dissipation of the dotcom bubble. He's been involved in a number of ventures since then, including Live Documents -- which, just as Hotmail shifted email activity to the web, shifts Microsoft Office-like activity online, allowing users to share or collaborate on documents, or simply sync them and work from different machines. Live Documents premiered in November of 2007.