Inc. has signed a definitive agreement to acquire Zimbra, Inc., a player in next
generation e-mail and collaboration software. The price: about $350 million in
cash and stock.
Zimbra acquisition is expected to help Yahoo expand its presence in universities
and businesses and through ISPs by enabling organisations to host e-mail on or
off their premises with their own domain. Zimbra''s offerings include AJAX-based
e-mail, calendar, and contact management features that can be used both online
mail service, one of the world''s most popular Web mail services with 250 million
users worldwide, celebrates its 10th anniversary this year. Zimbra is said to
have 9 million mailboxes across different segments. It is priced service, costing
students $1, faculty $8, ISPs, $3, and businesses $28 per user per year.
Zimbra email product will be pitched against Microsoft Outlook. Yahoo sees it
as a means to gain advantage in its competition with Microsoft and Google in the
market for Web-based collaboration software.
Zimbra deal comes close on the heels of Yahoo''s $300-million acquisition of online
advertisement network Blue Lithium and its purchase of the remaining equity of
ad exchange company Right Media that it did not own, for $680 million.
chief executive Jerry Yang says, "Our industry-leading communications products,
including Yahoo! Mail, are critical to the future growth and success of Yahoo!
Zimbra''s tremendous talent and innovative technology will help to extend our core
mail offerings." He also sees Zimbra''s relationships with large ISPs as key
to expansion of Yahoo''s worldwide partner network.
are excited to combine ourselves with one of the world''s most successful Web mail
services and extend Yahoo''s credible brand and leadership in the e-mail business
to universities, businesses and ISPs globally," says Satish Dharmaraj, Zimbra
co-founder and CEO.
will now become a wholly owned subsidiary of Yahoo. Dharmaraj will continue to
lead the Zimbra team based in Yahoo''s Sunnyvale headquarters and will report to
Brad Garlinghouse, senior vice president, communications and communities, at Yahoo.
The transaction is subject to customary closing conditions, including regulatory
approval. It is expected that the transaction will be completed in the fourth
quarter of 2007.