Yahoo to buy Zimbra

Yahoo enters software-as-a-service fray

Yahoo has agreed to buy Zimbra, a privately held company whose Web hosted collaboration and messaging suite is considered a successful example of the software-as-a-service model (SAAS).

Yahoo will acquire Zimbra for US$350 million in a transaction expected to close in this year's fourth quarter, the companies said Monday.

With Zimbra, Yahoo becomes a competitor to Google, Zoho, Cisco's WebEx and others that provide Web-hosted collaboration and communication suites.

Zimbra, like other Web hosted suite providers, is also considered a rival to Microsoft's Microsoft Office suite and Exchange messaging platform.

Yahoo is buying Zimbra in part to boost the Yahoo Mail Webmail service and leverage Zimbra's client base in universities, small and medium-size businesses and ISPs, Yahoo said.

In addition to e-mail, Zimbra's suite also includes calendar and contact management components, as well as an open platform that allows third-party developers to create mini-applications called Zimlets for the suite.

After the deal closes, Zimbra will become a Yahoo subsidiary.

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