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Yahoo Buys Zimbra for $350M in Cash

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Yahoo (YHOO) has purchased web-based email provider Zimbra, Kara Swisher is reporting. Mike Arrington has Om distracted judging at his TechCrunch40 conference, but says the price is $350 million.

Update: We just talked to a company spokesperson who confirmed the deal and the purchase price, adding that it was mostly in cash.

Yahoo had only just rolled out a major overhaul to its popular mail service, based on its $30 million acquisition of Oddpost in 2004.

When Om gets out, he’ll add to the story. In the past he had called Zimbra “email done right” and “quite impressive actually.” Some of us use it internally at GigaOM.

Zimbra had some six million users as of May. Yahoo Mail has more than 250 million.

Zimbra has raised about $30 million, and recently did a deal with Comcast (CMCSA) to offer its services to Comcast’s 12.5 million broadband customers.

21 Responses to “Yahoo Buys Zimbra for $350M in Cash”

  1. Maybe Y! Mail will implement a spam filter that actually works. The old web-based mail is archaic, the new “beta” mail is too slow, and the spam filtering is awful all around. I’m sure it’ll take Y! a long, long time to integrate this into Y! Mail. I’ll stick with Gmail for now. In 18 months, when Y! actually does something with this acquisition, I’ll take a peak back at Y! Mail and probably laugh.

  2. Wow, that is huge and a major shot in the arm for Yahoo. The only thing that would get me (and possibly many others) off Gmail would be a hosted reliable Zimbra solution running on network resources that Yahoo can provide. It is by far the best webmail application.