Yahoo sells Zimbra to VMware

Zimbra is off to VMware for an undisclosed price, which is likely much less than the $350 million that Yahoo paid for the open-source e-mail company in 2007.

Tom Krazit Former Staff writer, CNET News
Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.
Tom Krazit
2 min read

Yahoo has finally offloaded its open-source enterprise e-mail division, Zimbra, to VMware.

Financial terms of the deal were not disclosed, but the sales price is believed to be far less than the $350 million Yahoo paid for the company in September 2007. Kara Swisher at Boomtown reported that the sales price was "well below" the acquisition price, but didn't specify an amount.

Zimbra makes e-mail and office collaboration software, and some parts of its technology will continue to stay within Yahoo as part of Yahoo Mail and Calendar, Zimbra's Jim Morrisroe, vice president of sales, said in a blog post Tuesday afternoon. But Yahoo has been actively trying to shed businesses that CEO Carol Bartz considers to be peripheral in order to focus on Yahoo's core advertising and media businesses.

For its part, VMware said it wanted Zimbra to help it sell cloud-computing services to corporations. VMware is probably best known for its virtualization software, which lets you do things like run Windows and Mac OS X simultaneously on a Mac, but it is also trying to get corporations to let it run Web-based application environments. "In this way, the outstanding Zimbra team and their technology will be an important element in expanding our VMware vCloud strategy to deliver a well integrated portfolio of compute, application development, and core IT service clouds," VMware's Chief Technology Officer Steve Herrod said in a blog post.

This probably isn't the last business that Yahoo will unload in 2010, as it tries to reduce costs and get back on a growth track. Yahoo reports earnings in two weeks, when perhaps it might shed a little more light on what will be next on the chopping block.