Sabeer Bhatia: Things go cold for Mr Hotmail

Following the collapse of Sabeer Bhatia's latest venture, Arzoo.com, Andrew Walker of the BBC's News Profiles Unit looks at the rollercoaster career of the little-known founder of Hotmail.

The statement on the website is stark and terse. "I regret to inform you that we have shut down operations...necessitated by a severe downturn in the US Economy"

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Another business goes to dot.com heaven, a victim of the seemingly never-ending meltdown of online companies. But this site, Arzoo.com, (it means "heart's desire" in Urdu) was different.

This was no fly-by-night operation run from a bedroom somewhere by a couple of teenagers in Metallica T-shirts with five hundred bucks in the bank. For the man behind this company was Sabeer Bhatia, the multi-millionaire founder of Hotmail.

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The Times of India recently named him as one of the Indians of the Century, a pantheon which he shares with the likes of Mahatma Gandhi, Mohammad Ali Jinnah and Sunil Gavaskar.

This jewel in the crown of the, now somewhat tarnished, information superhighway was raised in the southern Indian city of Bangalore. Aged just 19, the gifted computer whiz moved to California with $250 in his pocket and a head full of ideas.

Revolutionised the Net

A successful scholarship at the California Institute of Technology was followed by a Masters from Stanford University and a stint at Apple Computer. It was while he was there that Sabeer Bhatia made the phone call that would transform his life and revolutionise the internet.

Their minds melded as they talked, completely in sync, leaping from one ramification to the next as simultaneously as the steps of two soldiers marching side by side. It was so powerful that sleep that night was impossible for Sabeer Bhatia, with the idea now in his head, exploding, autocatalytic, a bonfire of the mind.

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Frustrated by a corporate e-mail system which did not allow them to communicate privately, Bhatia and his college friend and colleague Jack Smith hit upon the idea of a simple, free and secure way of talking on the net. They called it Hotmail.

Two years later, with 22 million subscribers (now 65 million) and advertisers clamouring to subsidise the system, he sold the company, Hot Net, to Microsoft for a reported $400m: proof, if any were needed that, even in the digital age, the American Dream lives on.

By now Bhatia, still only in his mid-twenties, was a major player in two interlocking circles.

Sabeer Bhatia's creed is "work hard, play hard"

First, he was among that select group, almost exclusively male, of anonymous Masters of the Internet Universe: modern-day avatars whose merest utterances would inspire miles of journalistic copy and provoke even the dourest venture capitalist into handing-out vast amounts of money as if it were chaff in the wind.

Besides this, Sabeer Bhatia found himself at the very pinnacle of India's new entrepreneurial elite: a young, highly-motivated jet-setting crowd which has blazed a trail from Bombay to Bel Air bringing with it new products, new management attitudes and, above all, an unshakeable belief in the transforming power of technology. No wonder, then, that 30% of the software engineers in US corporations hail from India.

Frantic Social Life

With his Ferraris and an apartment overlooking San Francisco's Golden Gate Bridge, Sabeer Bhatia had it all. Work hard, play hard seemed to be his motto. 18-hour days in the office were complemented by a frantic social life: he told one newspaper, "From 6 p.m. Friday until Sunday, I'll be partying in New York."

But, following the sale of Hot Net, Bhatia refrained from jumping straight back into business. By now Corporate America was contracting, dot.com companies were opening and closing like flowers in the sun, rich pickings were harder to come by. But Bhatia bided his time, kept his powder dry.

India: Asia's sleeping tiger

That is, until September last year when, after some hard thinking, he launched Arzoo.com, significantly enough, in Bombay. "I'm certainly not doing it for money anymore," he said at the time. "It's the excitement to go through that challenge."

Arzoo was going to be different, a network of computer experts and consultants, mainly from India would be available, in real time, to help corporate subscribers. Simultaneously, Bhatia hoped to transform the way organisations solve their IT problems while unleashing the untapped potential of Asia's sleeping tiger on the West. He wanted to give his bit back to his homeland.

But it was not to be. The economic chill which now blows through Silicon Valley has frozen Arzoo while still on the vine. Even the cleverest and most careful of men baulk before the current recession.

This is not to say, though, that Sabeer Bhatia will not return. "I don't want to be branded Mr Hotmail for the rest of my life", he said recently and there is no doubt that his dynamic blend of East and West will make itself known again sooner or later.