Yahoo Inc and VMware have finalised an acquisition deal which will see the latter purchasing Yahoo’s enterprise email arm, Zimbra, which currently boasts of providing nearly 55 million email boxes to various organisations including prominent universities, business and internet service providers.
The financial details of the deal were not disclosed but industry experts are of the opinion that Yahoo will receive much less than the $350 million it had paid for it in the first place.
According to the deal, VMware will get to keep all of Zimbra’s technology and intellectual property whereas Yahoo will hold the right of using Zimbra technology in its Yahoo! Mail and Yahoo! Calendar web services.
The Zimbra sell-off will allow Yahoo Inc. to focus more effectively on expanding its web services and search engine capabilities along with advertisement revenue generation, a factor prioritised by Yahoo Chief Executive Carol Bartz.
Commenting on the rumors about Yahoo Inc. trying to dump Zimbra so that it can focus on a ad and media oriented approach, Zimbra general manager Jim Morrisroe told the Register that Zimbra and Yahoo developers were ‘working tightly’ to integrate Zimbra technology into Yahoo Mail.
However, Zimbra's General Manager also added that “it became obvious to me and to the Zimbra team when Carol took over that maybe we were a better fit with an enterprise software company, because of strategic leverage". Was Zimbra therefore pushed out?