Reports: Yahoo Buying E-Mail Startup Xoopit; Trying To Sell HotJobs and Small Biz

Yahoo (NSDQ: YHOO), which has said it wants to add social features to Yahoo Mail, is in late-stage talks to buy social e-mail startup Xoopit for roughly $20 million, according to a WSJ report, which cites unnamed people familiar with the situation (Kara Swisher says the company has been planning to announce the deal Thursday). Xoopit raised $5 million in a first round from Accel Partners and Foundation Capital last year. The startup’s Firefox plug-in, which works with Gmail, lets users sort and search through files, photos and videos they have sent or received — and then easily share them on social networking sites or blogs. The company also has a similar photo browsing application for Yahoo Mail.

New Yahoo CEO Carol Bartz has said that improving Yahoo Mail is a priority for the company — so the purchase would seem to fit with that goal. During the company’s earnings call Tuesday she called out the company’s plans for e-mail saying, “Our focus here is to provide open and social features in mail and make improvements to speed, performance and especially engagement.”

At the same time, Bartz continues to shut down or try to sell what she considers to be non-core properties. Yahoo says it has closed down 20 services since the fourth quarter of 2008. And PEHub reported this evening that Yahoo is now trying to sell Yahoo Small Business, which offers e-mail and web hosting. According to previous reports, the company is also talking to parties about offloading both Yahoo Hot Jobs and Yahoo Personals. A Yahoo spokeswoman declined to comment.