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September 17, 2007

Breaking: Yahoo Acquires Zimbra For $350 million in Cash

Michael Arrington

70 comments »

Yahoo will announce the acquisition of open source online/offline office suite Zimbra this evening, we just heard through a very solid source. The price: $350 million, in cash, confirmed.

Our coverage of Zimbra goes back to 2005. They gained wide exposure at the 2005 Web 2.0 Conference. Recently they launched offline functionality.

The company has raised $30.5 million over three rounds of funding from Benchmark Partners, Redpoint Ventures, Accel Capital, Sumitomo and Duff, Ackerman & Goodrich. They announced 6 million paid mailboxes back in March, and more recently inked a deal with Comcast that brings another 12 million potential subscribers.

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. That is, if they really want to dominate own this space and be a credible threat to Google Docs.

Update: Here is the Yahoo press release and Zimbra CEO Satish Dharmaraj’sblog post on the acquisition. And here’s the Yahoo official blog post.

  • Sphere It

This entry was posted on Monday, September 17th, 2007 at 11:52 am and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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Comments

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  1. Roy

    September 17th, 2007 at 12:06 pm

    Very interesting development. Sounds like the professional open source space is heating up.

    Roy
    Magento - Professional Open Source eCommerce
    http://www.magentocommerce.com

  2. Slappenstance

    September 17th, 2007 at 12:08 pm

    Wow. Zimbra is much better than goog office. This is a great buy in my opinion. Yahoo also has a much wider and loyal registered user base. It’ll be interesting to see how they integrate zimbra.

  3. John MacF

    September 17th, 2007 at 12:17 pm

    Are you kidding me? ZIMBRA is valued the as OPENWAVE? This is insanity. Granted, something is worth whatever the market will pay. But still, it’s insanity.

  4. PublisherZilla

    September 17th, 2007 at 12:17 pm

    You really think Zoho’s next. Zimbra + Zoho = some real good stuff. I’ll wait and see.

  5. Darren Stuart

    September 17th, 2007 at 12:23 pm

    I think IBM, sun, cisco or sap are more likely to have a run at buying zoho and take it to enterprise.

    congrats to all involved looks like a good buy for yahoo.

  6. rels

    September 17th, 2007 at 12:29 pm

    as a yahoo employee in the trenches — i gotta say this is a great pickup for us…love it!

  7. Tarch

    September 17th, 2007 at 12:32 pm

    I’ve been following Zimbra for a while and think this is a great move on Yahoo’s part. Can’t wait to see how they integrate.

  8. mathew johnson

    September 17th, 2007 at 12:37 pm

    perfect fit - zimbra’s webmail client is over ajax’ed and slow, just like the yahoo mail beta.

    http://mattishness.com/

  9. Geek Speaker

    September 17th, 2007 at 12:50 pm

    I sure as heck hope they don’t plan on killing the open source in Zimbra. Otherwise, great move.

  10. paintless dent repair tools

    September 17th, 2007 at 12:50 pm

    probably a good acquisition - this ruins my ideas though - that microsoft buys Yahoo! …

    - Perhaps - Yahoo! is under estimated, then again it doesn’t help stock when your dirty laundry gets aired.

    -.rb

  11. Geek Speaker

    September 17th, 2007 at 12:52 pm

    Mathew, you are right, but that doesn’t mean it can not get better. It runs a little bit faster if it’s not put on your three year old PC that you’ve had in the basement with 128 megs of ram…

  12. Geek Speaker

    September 17th, 2007 at 12:57 pm

    This will put an end to Zimbra using Google Search as the default. Downloading last Google Tarball! :P

  13. petieg

    September 17th, 2007 at 1:07 pm

    uuuggghhh… this is bad news imo — zimbra is the best groupware suite out there — cross-platform (even for server), rich web client, integrated zimlets, outlook/isync connector, archiving and discovery, several hosted providers, free-open source edition, future IM and iPhone interface .. Yahoo will just ruin it, I know it will!!!

  14. Vinod

    September 17th, 2007 at 1:13 pm

    Heard, Microsoft is eyeing ThinkFree!

  15. z

    September 17th, 2007 at 1:16 pm

    Wow… Yahoo is really throwing down the gauntlet this time.

  16. Geof Harries

    September 17th, 2007 at 1:20 pm

    Petieg - I don’t think Yahoo! ruined Flickr with its acquisition. Seemed to result in a better product all around. Perhaps the same will happen here.

  17. Steve Ballmer

    September 17th, 2007 at 1:43 pm

    We are not eyeing Think-free! We have our own cloud apps, thank you very much. All of these wannabes are unnerving me!
    http://fakesteveballmer.blogspot.com

  18. Nicki Dugan

    September 17th, 2007 at 1:49 pm

    Head over to Yahoo!’s corporate blog (Yodel Anecdotal) for our take on it…

  19. Andrew

    September 17th, 2007 at 1:52 pm

    zoho to MSN. Thats my guess.

  20. Todd Zaki Warfel

    September 17th, 2007 at 1:57 pm

    As someone who as worked with a big client who’s moving to Zimbra, I’m glad to see Yahoo! pick them up. I really hope they can fix a lot of the clunky UI issues and speed problems.

  21. Velioncho

    September 17th, 2007 at 2:02 pm

    how big of a deal is to develop these on you own?

  22. Blake Brannon

    September 17th, 2007 at 2:07 pm

    Will someone please emerge as the online documents leader. It would be nice to have all my docs (with full compatibility with MS Office) in one place.

  23. gratis

    September 17th, 2007 at 2:24 pm

    Zimbra 5 will answer the documents question in a major way, due out next month, or soon after. Check out Zimbra briefcase. I just saw this, too, on the impact of the acquisition on Zimbra hosting providers and integrators: http://blog.01.com/?p=325

  24. km4

    September 17th, 2007 at 2:45 pm

    Yahoo once again shows why they are 2nd rate company.

  25. Zuggu.com

    September 17th, 2007 at 2:47 pm

    … is Microsoft even reacting to some of this or what?

  26. Jeremy Chone

    September 17th, 2007 at 3:06 pm

    Congrats Scott ! Well deserved.

  27. Techy Uncle

    September 17th, 2007 at 3:39 pm

    10 employess - all in india. Good going for international developers bringing so much value. This shows we are truly living in global delivery model.

  28. Fabian Schonholz

    September 17th, 2007 at 4:08 pm

    I checked Zimbra out a few months ago for email and collaboration. My team and I liked it but it did not play with AFS, so we decided against it.

    Congrats!!

  29. xxdesmus

    September 17th, 2007 at 4:11 pm

    If though bought Zoho that would be a scary combination now that they have bought Zimbra. Thanks for the heads up…very interesting news.

  30. Patrick Grote

    September 17th, 2007 at 7:58 pm

    Somewhere in the comments on a Zoho article I commented about Yahoo buying them. One can still hope. Zoho has a few features that would integrate very well with current, and now new, Yahoo offerings.

  31. chris cavalieri

    September 17th, 2007 at 8:47 pm

    electric cigarette making big splash in the states.

  32. Murali

    September 17th, 2007 at 9:06 pm

    Yahoo would have acquired ZOHO if ZOHO would not have gone for Google Gears for offline capability of their apps.

  33. Toon Vanagt

    September 18th, 2007 at 12:46 am

    Sounds like great news for the few other Office 2.0 players such as http://www.zoho.com http://www.thinkfree.com and http://www.contactoffice.com

  34. Phusion

    September 18th, 2007 at 10:48 am

    Repent! Repent! *cough* I mean, well, we use Zimbra for all inter-office communication here– Here’s hoping nothing goes fruity.

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