Yahoo buys e-mail software firm Zimbra

Yahoo's $350 million purchase shows commitment to communications services as company redefines its place in the market, says exec.

Yahoo is buying e-mail software provider Zimbra for about $350 million, the companies announced on Monday. Zimbra offers branded e-mail with calendar and mobile features as well as the ability to work offline. The company has more than 200 educational, business and ISP partners, including Comcast, that offer branded e-mail service to roughly 9 million subscribers.

What differentiates Zimbra are the "Zimlet," Web service mashups that offer richer functionality in e-mail. For instance, people can simply mouse over airline flight information in an e-mail to check on flight status. Users are also able to track FedEx deliveries and get maps, stocks and other information in e-mail too.

The Zimbra acquisition, which is expected to be completed by the end of the year, and Yahoo's $300 million purchase earlier this month of display ad provider Blue Lithium are an indication of the future direction of the company as it redefines its place in the market, says Brad Garlinghouse, senior vice president for communications and communities. "They illustrate the commitment to areas we feel are core strengths," he said in an interview on Monday.

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