alarm:clock

Web 2.0 - Monday, September 17, 2007

Yahoo To Pay $350M For Zimbra

No sooner do we publish a post indicating that Wall Street wants Yahoo to scale back spending and figure out a new strategy and the company is caught doing another M&A deal. This time Yahoo is buying white-label open-source email/online calender/collaboration tool maker Zimbra for a reported $350M.

There are no flies on Zimbra. In fact, last May we added the company to our Mojo Found list for its deal with Comcast where Comcast email users would get to use Zimbra.

In April 2006, Zimbra won $14.5M in strategic series C funding led by Duff Ackerman & Goodrich with Sumitomo in as well. Existing investors Benchmark Capital, Accel Partners, Redpoint Ventures and Inventures Group were also back in the round.

There is already a round of applause to Yahoo for this deal but we have to return to the poor guys on Wall Street. If almost all of the Yahoo business units (save Flickr and Yahoo Answers) are losing traffic then there is something terribly wrong about the way Yahoo manages its content. We understand its purchase of Blue Lithium as that is a growing profit center but if Yahoo can't manage to retain visitors perhaps it should stop buying content application companies and figure out how to better manage the business it has.

Read - Zimbra blog announcement