The concept of viral marketing is fairly new. It was coined by the guys of Hotmail in around 1996.The internet was that time in a nascent stage, so people had never heard of a kind of marketing which could spread like virus. Since emails could go very fast and fast and reach millions of people in just a few hours, the concept of viral marketing was born with internet.

Now what the guys at Hotmail did(before they sold themselves to Microsoft)was that they used to offer free email service to people(at that time even the concept of free email was relatively new)and would advertise its free email service in the footers of the mails sent from person to person(the footer was something like this- 'Click here to get your FREE Hotmail account').And you guessed right, with almost zero advertising on their part Hotmail had reached well over millions of members using this concept of free viral marketing.

Viral marketing is so called because as one can understand, it spreads like a virus. A virus duplicates itself with everything that comes into contact with it. Every new contact then becomes a host and can start off the process on its own leg.

For example suppose I have viral fever and you come in contact with me, then the virus spreads from me to you. Then the virus spreads from you to somebody else who comes in contact with you, and so on and so forth. The concept of viral advertising also works in a similar way!