Yahoo's acquisition of Zimbra for $350 million could pit the company against Google's office productivity plans.
After market close on Monday, Yahoo confirmed plans to buy Zimbra. Dan Farber has a full account. Word of the deal leaked out to TechCrunch, AllThings D and The Wall Street Journal. Zimbra provides email and calendar services and has been long rumored to be a takeover target.
But once the nuts and bolts are out of the way it certainly sounds like Yahoo has some eyes for the online productivity space. Yahoo would have to couple Zimbra (all resources) with another property, say Zoho, but it's quite possible that Yahoo will wind up with a suite even though it is apparently downplaying the possibilities.
Yahoo CEO Jerry Yang said in a statement:
"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, further strengthening our strong leadership position in this space. Additionally, Zimbra's successful relationships with large ISPs are key as we expand our worldwide partner network and continue to focus on our commitment to being the partner of choice."
Zimbra will be an interesting addition to Yahoo's portfolio. The subliminal message from Yahoo seems to be this: Yahoo won't let Google Docs and Spreadsheets get traction without a fight. Zimbra is well respected and could get more traction with some marketing heft.
Judging from Yahoo's statement Yang doesn't sound shy about taking on Google Office.
Yahoo said the purchase of Zimbra will expand the company's presence "in universities, businesses and through ISPs by enabling organizations to host e-mail on or off premises with their own domain."
Funny how those areas sound similar to where Google plays ball.
The next move could be to take Yahoo Mail offline. One of Zimbra's key features is its ability to take its AJAX-based e-mail, calendar, and contact management features offline.
Zimbra will become a subsidiary on Yahoo. Satish Dharmaraj will continue to lead the Zimbra team based in Yahoo's Sunnyvale headquarters and will report to Brad Garlinghouse of Peanut Butter Manifesto fame.