Into the 21st century, Hotmail is the world's second largest e-mail provider with over 369 million registered users, a figure exceeded only by Google's Gmail service.  As President and CEO, he guided Hotmail's rapid rise to industry leadership and its eventual acquisition by Microsoft in 1998. Bhatia worked at Microsoft for a little over a year after the Hotmail acquisition and in April 1999, left Microsoft to start another venture, Arzoo Inc, an e-commerce firm. 
Bhatia started a free messaging service called JaxtrSMS. He said that JaxtrSMS would do to SMS what Hotmail did for e-mail. Claiming it to be a disruptive technology, he says that the operators will lose revenue on the reduction in number of SMSes on their network but will benefit from the data plan that the user has to buy.  To date, JaxtrSMS service has failed to replicate the success of Hotmail. Recently, he invested in email collaboration software, ccZen.
Acclaim and legacy
Bhatia's success has earned him widespread acclaim; the venture capital firm Draper Fisher Jurvetson named him 'Entrepreneur of the Year 1997', MIT chose him as one of 100 young innovators who are expected to have the greatest impact on technology and awarded 'TR100', San Jose Mercury News and POV magazine selected him as one of the ten most successful entrepreneurs of 1998 and Upside magazine's list of top trend setters in the New Economy named him 'Elite 100'.