September 19, 2007 | Wednesday

Yahoo pays £175 million…for email software?

By Jackie Danicki - Blogger in News |Search Engines |Google |Yahoo

Well, it’s a bit more nuanced than that - Zimbra also makes diary ("calendar" in Yank-speak) applications - but this news still has industry observers scratching their heads.

Yahoo exec Brad Garlinghouse (he of the infamous Peanut Butter Manifesto) blogs that ”Zimbra is so damn cool” and urges readers to check out the Zimbra demo, saying:

You’ll really notice the wow-factor when you hover over content in email messages and get pop-up previews. The phrase “tomorrow at 10:00 AM” will display any appointments you have at that time, “701 First Avenue, Sunnyvale CA” will launch a Yahoo! Map, a tracking number gives you package delivery status, a phone number lets you make a VoIP call, a flight number provides status details, and so on.

Only $350 million in cash for this? Bargain! (With Zimbra recently claiming 6 million paying customers, that’s about £20 per active mailbox. And they say there’s a tech bust coming soon...)

One possibility being thrown around is that Scott Dietzen, currently serving as president and Chief Technical Officer of Zimbra, will be named Yahoo CTO, with Zimbra CEO Satish Dharmaraj replacing the unpopular Marco Boerries as head of Yahoo’s mobile business. Call me crazy, but it seems like it would have been cheaper just to offer those two REALLY massive salaries in a poaching exercise, rather than shelling out £175 million in cash for their email software.

So maybe the applications really are just that good, and this really is Yahoo’s move in a tactical game to annihilate Google Docs. As ever, watch this space…