Confirmed: Yahoo Sells Zimbra To VMWare

Zimbra

It’s official: VMWare is buying Yahoo’s Zimbra e-mail and communications platform, which Yahoo (NSDQ: YHOO) had put up for sale in late September. No financial terms are being released, although most reports have put the purchase price far below the $350 million Yahoo paid for Zimbra two years ago — a deal whose rationale was questioned from the day it was announced.

Under Yahoo’s ownership, Zimbra’s customer base has grown; the company now claims to serve over 55 million mailboxes, up 86 percent over the last year alone. Yahoo has also incorporated some of Zimbra’s technology into products like Yahoo Mail and Yahoo Calendar. And, indeed, under the terms of the agreement, Yahoo can continue to use Zimbra technology in its communications services.

VMWare’s interest in Zimbra is a bit of a mystery since VMWare focuses on selling virtualization technology; in the release, VMWare offers somewhat of an explanation saying that the purchase furthers its “mission of taking complexity out of the datacenter, desktop, application development and core IT services” and that it will be a “building block in an expanding portfolio of solutions that can be offered as a virtual appliance.”

This is Yahoo’s first major sale under CEO Carol Bartz, who has also put properties like Yahoo Hot Jobs and Yahoo Small Business on the block. Here’s the release.

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