Yahoo buys Oddpost e-mail company

Yahoo has acquired Oddpost, a startup that provides an innovative, Web-based e-mail service, and plans to use its technology to spruce up Yahoo Mail and other Yahoo services, the companies confirmed Friday.

Like other Web-based e-mail, Oddpost uses a standard Web browser, but its interface functions more like that of a desktop program such as Microsoft's Outlook. For example, users can organize or delete messages by dragging them into folders instead of having to reload a Web page each time. Oddpost says this makes it quicker to use. Its users pay US$30 per year for the service, which can also be used to aggregate content from news sites and Web logs.

A Yahoo spokeswoman confirmed the acquisition Friday but would say little about Yahoo's plans. "All I can say is that they have outstanding technical expertise that will be brought to bear on products across the Yahoo network, such as Yahoo Mail," said spokeswoman Joanna Stevens.

A Web posting from Oddpost to its subscribers on Friday was more revealing. Oddpost will be working on "a new, advanced Yahoo Mail product" that incorporates Oddpost's technology, the posting said, adding that a date for the new product has not yet been set.

Oddpost was founded about three years ago and has 10 employees, all of whom now work for Yahoo, said Toni Schneider, Oddpost's chief executive. The acquisition was completed Friday and financial terms are not being disclosed, he said.

The Oddpost service works using Dynamic HTML, XML (Extensible Markup Language) and SOAP (Simple Object Access Protocol). It does not use Java and requires no downloads or plug-ins. It currently works only with Microsoft's Internet Explorer browser, although Oddpost had been developing a version for Mozilla, Schneider said.

Oddpost stopped accepting new subscribers last week. Current users can keep using the service and will be switched to the new Yahoo Mail service when it's completed, Oddpost said in its posting. Schneider wouldn't say how many subscribers Oddpost has. The company also licences its technology to enterprise software vendors including Oracle Corp., which uses it in the Oracle Collaboration Suite, he said.

Yahoo's acquisition comes at a time of heated competition in the Web-based e-mail market. Google Inc. spiced things up earlier this year when it announced its Gmail service, which is currently being tested and offers 1G-byte of storage. Yahoo responded last month by revamping its user interface and upping its own storage limit to 100M bytes for its free service. Its purchase of Oddpost seems likely to spark another round of innovation.

Oddpost's history, recounted on its Web site, reads like a Silicon Valley fairy tale. In late 2000, founders Ethan Diamond and Iain Lamb bought a pair of cheap laptops, signed up for a wireless Internet service and "started coding away in San Francisco's public libraries, cafes, and late-night eateries." They eventually moved to an office, a former hardware store in San Francisco's Chinatown district.

"Our goal was to build a better e-mail product, and as we started building a business, we were able to grow and we brought in some investors," Schneider said. "The goal was to keep growing until somebody came along that made a lot of sense, and that's what happened with Yahoo."

Oddpost's posting to its users about the acquisition is in the form of an FAQ (frequently asked questions). It reads in part:

"So what you're saying is that Oddpost is disappearing into the bowels of corporate America?"

"On the contrary: our technology will flourish like a palm tree and/or IT professional's waistline in Silicon Valley. While the glory of Oddpost has, thus far, been witnessed by the eyes of an enlightened few, soon it will be savored by millions. We couldn't be more excited."

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