Updated: Yahoo Is Buying E-mail and Communications Suite Zimbra For About $350 Million


imageUpdated: has been officially announced, and the price is $350 million. This is how it will help Yahoo (NSDQ: YHOO): this will expand its presence in universities, businesses and through ISPs by enabling organizations to host e-mail on or off premises with their own domain, the release says. Zimbra CEO Satish Dharmaraj will continue to lead the Zimbra team based in Yahoo’s Sunnyvale HQs and will report to Brad Garlinghouse. The transaction is expected to close in Q4 this year.

Yahoo is buying white-label open-source e-mail and communications suite provider Zimbra, reports Kara at AllThingsD, citing sources. The price is around $350 million, the story says, which is a big premium on its latest valuation. The San Mateo, CA-based company has investment from Benchmark Partners, Redpoint Ventures and Accel Partners, and has raised a total of $30.5 million in three rounds.

In May Zimbra did a big deal with Comcast (NSDQ: CMCSA), where the two are building what they call SmartZone communications center for Comcast customers who use the company’s full menu of phone, cable modem and cable TV services. Customers will be able to check their e-mail or voice-mail messages and manage a universal address book. Interesting to see if Yahoo expands those kind of bigger white-label deals.

This is Yahoo’s second online mail client acquisition after Oddpost, which it bought in 2004, and then used its technology to relaunch Yahoo Mail The relaunch of Yahoo mail has been well received, with integrated IM messaging within the mail client, the Ajax-ification of the client itself and other customizable features. How would this play with Zimbra, remains to be seen.

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