Yahoo! Beefs Up Email with $350M Zimbra Acquisition

Yahoo! announced it has agreed to acquire Zimbra, maker of on/off-line open source email software, for $350 million in cash. Zimbra will expand Yahoo!'s presence in universities, SMEs and ISPs. Zimbra email features AJAX-based "Zimlets," which allow interactive mashup services within email, such as schedule reminders, flight updates and package tracking. Zimbra, with 9 million paying subscribers, was founded in Dec. 2003, and since then has raised $30.5M in VC financing. Yahoo! Mail is in its tenth year and had 250M users worldwide in July. "This was a very, very smart acquisition. In one quick move Yahoo is now in the race with Google for the next generation online/offline office suite. I would not be surprised to see them pick up Zoho next," said Michael Arrington, editor of TechCrunch. Separately, Google is set to release its Web-based presentation application Tuesday, a component of its growing Apps suite, and a new competitor against Microsoft's PowerPoint. Shares of Yahoo! gained 0.9% to $24.95 on Monday, Google lost 0.7% to $525.30 and Microsoft fell 1.1% to $28.73.

Sources: Press release, BetaNews, MarketWatch, Wall Street Journal
Commentary: Something's Going On At Yahoo - Expecting More Upside • Yahoo! Secures Deal with Social Networking Site Bebo • August Online Search Market Share: Back to Status Quo
Stocks/ETFs to watch: YHOO, GOOG, MSFT

Earnings call transcript: Yahoo! Q2 2007, Google Q2 2007, Microsoft F4Q07

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