Yahoo has acquired e-mail startup Xoopit for a reported $20 million according to multiple reports. The deal, which was first reported to be in the final stages of closing earlier this morning by the Wall Street Journal, is expected to be announced at Fortune’s Brainstorm Tech conference as early as tomorrow.
Xoopit essentially offers an easy way to organize and manage e-mail, having invented an indexing architecture similar to web search engines that helps users retrieve content from their archived e-mail, including attachments.
The startup raised a total of $6.5 million to date, securing seed funding amounting up to $1.5 million back in December 2006 and raising $5 million more from Accel Partners and Foundation Capital in April 2008.
Ever since its public launch, the startup has been focusing a lot on ‘upgrading’ Gmail, bringing an enhanced media search feature and direct Facebook connections to Google’s free webmail service. In fact, their focus was so clearly set on Gmail that the startup’s ‘About’ page currently speaks of nothing but the webmail service and how it improves its users’ experience in terms of e-mail management.
Sure enough, Xoopit was also a featured app on the Yahoo Mail applications platform since the latter debuted last December, but I can’t help but thinking it should have been Mountain View pulling in Xoopit instead of Sunnyvale.
Think about it: Gmail and by extension Google Apps are core products for Google, which is in essence a search engine company. Xoopit enhances the search functionality of their web-based e-mail service. You’d think it’s a no-brainer for Google to go after the startup if they knew its management and investors were open to a sale.
And if the selling price was really only $20 million, it’s not the money that would make Google think twice. With a bottom line like Google’s, an acquisition of this size is basically pocket change for the company, and yet they’d be picking up an agile startup creating a product that’s highly relevant to their core service offering. Furthermore, it’d make for a great talent buy, if only for the startup’s founders Bijan Marashi (ex-Telecom Italia, Inktomi and Microsoft) and Jonathan Katzman (former exec at TellMe Networks and also an ex-Softie).
Kudos to Yahoo for snapping up Xoopit – I realize it makes sense for them too – but why didn’t Google make this move?
Right. So Yahoo pulls a good move, but your angle is that the almighty Google let it slip away. Shows the ridiculous anti-yahoo bias of the tech community.
I know it’s a good fit with Yahoo too, and there are startups that would be better off getting acquired by Yahoo than Google. Xoopit was not one of them, though.
I don’t agree that it would have been better off with Google. Google also has a history of acquiring a great product with a clear growth track and then letting it drop into oblivion (Analytics for example).
Yahoo had a greater need for Xoopit and the people within Xoopit probably recognized this and now well be able to have a greater impact on a major company than they would have had at Google which also secures their future within Yahoo better than at Google.
What surprises me, though is the $5m in capital they raised in a later round – did those guys get more than 25% of the company? Hope so…
They probably got liquidation preferences too. I would guess that Accel and Foundation walked away with close to 2X.
I think it can be argued that yahoo has let plenty of acquisitions flounder.
I personally think they should be doing much more with flickr and delicious, but that’s just me.
at least flickr and delicious actually lived on…you’re not even mentioning all of the ones that were deprived of all oxygen…jumpcut,maven, etc
Seriously! We already know who TechCrunch is cheerleading for. Just _kills_ them to acknowledge a smooth move on Yahoo’s part, doesn’t it?
I totally agree.
TechCrunch is obviously anti-Yahoo. Stating an observation that actually makes sense clearly indicates Yahoo is the red-headed step child. Hopefully Robin’s favorite color isn’t Red because all of those pro-Blue supporters will flip their shit.
Basically I’m with Yannick … although I’m not thinking of TechCrunch as anti-yahoo, but sometimes too focused on Google. I’m glad Google is not the only player in the game!
Perhaps Google has something in the pipeline that blows this away?
Maybe it’s all going to be “wave” in the future?
Sure they had their reasons.
^This.
yes its Wave which is why Google would have ignored this!
Exactly. Why would Google buy “old” technology. They’re about to open the floodgates on email and photo management.
Bingo!
Probably right.
Anyway, it’s silly to say $20m is pocket change. It’s like paying $20m for a gmail labs feature. There is no biz model behind it.
I think Yahoo made a mistake on this one. Xoopit could be reverse engineered for probably $10k in a month.
A search engine would buy a company for several reasons: new audience (google doesn’t need it desperately), IP/ product (Xoopit is tremendously close in functionality to Google Wave) or people (Google is trying to offload some).
It doesn’t make any sense for Google to buy Xoopit, but all the above reasons are a good fit for Yahoo. Also, in the current market conditions, I assume that the price tag came with a discount. Agree?
They wouldn’t have needed to buy them for the audience or revenues, that’s for sure. But Google didn’t stop hiring talented people when they announced lay-off rounds, and the product is already there (while Google Wave is not). Current market conditions apply to everyone.
Finally: if it’s that good a fit for Yahoo, it even makes more sense for Google to snap them up, no?
No. Do you really expect Google to bid on a company just because Yahoo is?
No, but it helps.
Why Did Google Let Yahoo Run Off With Xoopit?
Because ‘Wave’ is going to make email obsolete?
Hyperbole detected.
Care to enlighten us as to why SMTP will ensure that Google Wave never takes off? I assume this is what your comment is suggesting.
I asked myself the same question. Maybe they are trying to steer away from downloads.
me too!!!
Perhaps there isn’t much IP there that Gmail’s Labs team or Wave haven’t already got in the can?
Raising 11 millions and selling for 20? They must be desperate to sell…
they raised about $6.5 million in total
Maybe Google knows that if they bought Xoopt it would be solely a defensive move. Xoopt would sit on the shelf unused because of other things in Google’s oven, just to keep it out of the hands of competitors.
I like to think that they WANT competition and believe that it only makes them better. But I admit – I look at Google through rose-colored glasses.
A defensive move, perhaps, but they could of also used it to enhance the Gmail experience.
No, maybe this little company start-up never really got enough of Google’s attention to make them realize what kind of an opportunity it was.
because email has been squatted by spammers and the Wave is coming.
The real question is why anyone would want to buy them.
Search just isn’t that hard anymore and I found this app to be pretty lame. I’m sure if Google wanted to add these features, it would be pretty straightforward, but frankly I uninstalled Xoopit a long time ago.
Was going to comment but posters have already covered it. Build or buy. Google can afford to build right now.
i don’t thing that google need to do this . because google will still the most powerfull without them
No one has even mentioned the increased anti-trust scrutiny Google is under right now.
Ever since the DoubleClick acquisition, every move Google makes (including the book scanning settlement and the abortive Yahoo Search deal) draws more attention from the government.
“Innocent Google”, from several years ago, makes this deal in a heartbeat. Now, it would be another example of using profits from search to stifle innovation.
See: http://searchen...very-real-18988
Robin Wauters, you and Google really stinks
Trusting Yahoo! with my GMail password
Congrats to Bijan, JK and all you guys at xoopit!
Wow, the fan boy really wags his tail on this one. Guess we’ll never know why your dear Google didn’t pick up this company. But we know you’re disappointed, and we know you have absolutely no credibility left covering either Google or it’s competitors.
this product is like what xobni is to outlook… its clearly extends and enhances gmail… it makes sense to acquire a startup for new innovative features as the core product stagnates over time (in terms of truly innovation)…
Google does care. They can build this in-house. Accel dumped this turd on Yahoo so they could get out of their investment.
$1,000 says the founders walked away with nothing.
or some token amount…accel probably told them to take the deal or take a walk
they probably walked away with a hell of alot more than the $1,000 you are willing to put up.
by your estimates, $6.5 million in total investment and a $20 million selling price leaves $13.5 million unaccounted for. and you think jk and bijan walked away with “nothing” or “some token amount”? A few million dollars must be chump change to you. And you don’t consider the fact that they’ll probably be raking in large salaries from yahoo for at least the forseeable future.
when people don’t know the business side of things, they shouldn’t speak on it. after you build something innovative from the ground up and sell it for $20 million, then your speculation will be noted.
They didn’t get it because Yahoo! got there first, Google likes to wait an then overpay for things.
Just goes to show that Yahoo will buy anything. Xoopit… what a bunch of crap.
The answer is simple…because they have google wave coming up.
why would google want xoopit?
they probably have all the technology xoopit has and more, but it’s all behind the scenes, being integrated into the google framework. integrating is what takes the longest. and right now, xoopit might look quite integrated with gmail, but at the back end, it’s most certainly not, and integrating xoopit would take google much longer then completing the integration of technologies they already have. technologies that are made exactly how google wants them to be.
I’ve not used Xoopit but… it looks a little like Google WAVE….. Will have to play with it and write something up.
this will follow standard yahoo script…
1. initial excitement over acquisition
2. announcement that integrating the tech will take time
3. xoopit employees lost in the shuffle, fail to get anyone’s attention
4. yahoo continues to punt on doing anything interesting
5. a year passes, xoopit employees start to head for the door, others who want to stay get rotated onto drone work for yahoo mail
6. someone on techcrunch asks “whatever happened to the xoopit thing??”
7. six months later, yahoo announces a shuttering of xoopit
this script has been repeated countless times at yahoo just in the last three years. rightmedia, bluelithium,maven networks,jumpcut..ETC ETC ETC
Does not make sense for Google to buy it. Gmail Lab already offers the image/videos/yelp previews in mail. This functionality can be extended with little effort to work just like Xoopit.
lol, $20 mil for a fuckin plugin? smooth move you say?
Congrats Xoopit. Dont spend it all in one place
Dude…Google doesn’t buy search companies. I don’t know Xoopit, but if their core competency is search then Google doesn’t care, even if they can piss on $20 mil.
Hmm….
“….Xoopit essentially offers an easy way to organize and manage e-mail, having invented an indexing architecture similar to web search engines that helps users retrieve content from their archived e-mail, including attachments….”
Sounds to me like standard email parsing. As I said over gigaom this morning, this is something that Yahoo could have done in a heartbeat.
Cause they’re XOOPIT I guess
I don’t even know why anyone would buy it – great exit for the guys; but after using Xoopit for a bit I got bored with it right away. Why Yahoo continues throwing $ millions at things they won’t properly integrate is beyond me.
Maybe this was a “Graceful” exit for the VCs and the $20MM is really $6.5MM plus a good earnout.
Why would Google buy that which they can reproduce with ease? Hell, Yahoo could have done this in house too. If these features mattered and/or matter to the multitude I am sure Google will just add them.
The fact is that the technology is not ground breaking and is not hard to reproduce if the need should arise.
Do not get me wrong, the crew at Xoopit are doing a great job. I am simply saying that Google has not reason to purchase the product.
Then Google woudn’t have bought Dodgeball, Jaiku, Jotspot, You Tube, Orkut and all that stuff..
Maybe Google already learned the lesson of buying Youtube. There is a lesson with the saying “not all that glitter is gold”.
it’s time for yahoo to catch up with google
seems just like a flickr clone
It’s no way Flickr clone. Use it to get to know it. It can act as addon for flickr.
Woah! Was xpecting this move from them after all the buzz that was created in the company in Hack Day for Yahoo! Mail apps. great move by Yahoo!..
So looks like Yahoo dominates the photo media..
Flickr >>>>>>> PicasaWEe
Xoopit >>>>>>>>>>>>>>>>>none
I now only hope for a good Desktop app like Picasa Software from them
I have often wondered why Google haven’t yet integrated Google Docs with Gmail in a Xoopit kind of way. They may be taking their time but I think it’s coming.
I think there’s going to be some interesting stuff emerging from Google soon. I cant wait to see what the Gdrive rumours and the new Google Docs and WAVE eventually materialise into.
In the mean time I’ll be saying farewell to my Xoopit account. It had potential but I was always frustrated by its focus on images. It was never as useful as I’d hoped when it came to my document attachments .
Google fanboy or not, the question was legit. Just not 100% thought out. If someone has something that enhances your product (and from the outset that was Xoopit’s goal – kiss up to Google and become the latest to be bought by them) you sign the papers and make them your own. The reason it didn’t happen is 99% Google Wave, and 1/2% anti-trust… the other 1/2% is pure “we don’t need to buy everyone anymore, we can make things ourselves” attitude. There will be fewer startups purchased from Google I believe and they will simply start creating their own thing to a fuller extent (they already believe they have everything it takes to fill up a computer with purely Google products from OS to Office.. even screen saver.) It’s a given though that THIS was not a mistake or a missed opportunity on Google’s part. Yahoo on the other hand NEEDS quick and inexpensive (man I wish $20 million was inexpensive to me!) boosts and this MAY be good for them.
I’m prety sure they had their reasons.
Yahoo Inc. is not any company, they sould play safe with big things.
At $20 million, the company is so small that quite honestly, I think Google would have let it flounder if it acquired it. Google’s track record with small acquisitions is mixed (e.g. Dodgeball, Jaiku, etc.) Until recently, bloggers where wondering what was going on with Grand Central.
Furthermore, the type of technology Xoopit has (i.e. search) is a core strength of Google. They are probably working on similar features.
On the other hand, for Yahoo, the technology is truly incremental to their email platform, and we can rest assure, Yahoo can’t afford to blow $20 million to let an acquisition languish.
I would rather see google partner with Evernote. Hmm, google quit developing their note taking app……
WAVE goodbye to email .. to a bunch of other stuff too.
If you haven’t played with WAVE you have no clue … that is what Google are working on integrating at the moment and THOUSANDS of other developers are working on integrating WAVE into TWITTER, ORKUT … all social networking sites and much more.
Xoopit functionality is a widget add-on.
WAVE is a total redefinition of communications protocols and platforms … and allows for anyone to develop widgets/apps to fit into the WAVE or draw the WAVE into their site.
Don’t know what WAVE is .. then Google it and watch the demo. It will be the biggest change factor in communications and social networking of this decade.
There is already a stealth startup that will pick up where Xoopit left off with Gmail and the others.
Wonder if Techcrunch has talked to them yet. Why have they not been covered?
A very good option and alternative for xoopit gmail users – http://www.prwe...rweb3046644.htm