Another Big Yahoo! Acquisition: Zimbra

Yahoo’s continuing its acquisition tear with the $350 million acquisition of Zimbra, the highly regarded (and highly funded) online office-productivity applications. Clearly, Yahoo’s cofounder and new CEO Jerry Yang has a lot of ambitions in mind, and now Yahoo has jumped squarely into competition not only with Microsoft but Google, whose Google Apps has been a special focus lately. Mike Arrington thinks it’s a great idea, and adds another office-apps company, Zoho, to the list Yahoo should acquire. Dan Farber ran into Zimbra CEO Satish Dharmaraj and Yahoo’s Brad Garlinghouse and gets the thinking behind the deal, which has to do largely with extending Yahoo Mail’s capabilities. But I do wonder if it’s a fair chunk of change for something that doesn’t seem squarely within Yahoo’s core, especially as Yang tries to focus the company more sharply. It’s a very promising area, of course—software is rapidly moving off the desktop—and Zimbra justly get high praise. But is very business-oriented online software something most people look to Yahoo to deliver? Don’t think so, not yet anyway. As with yesterday’s beta launch of Mash, Yahoo’s new social networking service, you can’t accuse Yahoo of playing the shrinking violet as it struggles to become more relevant in Google’s lengthening shadow. But pulling all this stuff together is going to be harder than ever now.

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