Yahoo to buy Zimbra for $350M

Deal adds Yahoo to players in Web-hosted collaboration suites

Yahoo Inc. has agreed to buy Zimbra Inc., a privately held company whose Web-hosted collaboration and messaging suite is considered a successful example of the software-as-a-service model.

Yahoo will acquire San Mateo, Calif.-based Zimbra for $350 million in a transaction expected to close in this year's fourth quarter, the companies said today.

With Zimbra, Yahoo becomes a competitor to Google Inc., Zoho, Cisco Systems Inc.'s WebEx Communications Inc. unit and other companies that provide Web-hosted collaboration and communication suites.

Zimbra, like other Web-hosted suite providers, is also considered a rival to Microsoft Corp. and its Office suite and Exchange messaging platform.

Yahoo is buying Zimbra in part to boost the Yahoo Mail Web mail service and leverage Zimbra's client base in universities, small and midsize businesses, and Internet service providers, Yahoo said.

In addition to e-mail, Zimbra's suite also includes calendar and contact management components, as well as an open platform that allows third-party developers to create mini-applications, called Zimlets, for the suite.

After the deal closes, Zimbra will become a Yahoo subsidiary.

Copyright © 2007 IDG Communications, Inc.

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