Search engine giant Yahoo announced on Monday it has agreed to acquire Internet-based email and collaboration services provider Zimbra for $350 million. Yahoo CEO Jerry Yang says that Zimbra will help the company strengthen its own email service, and provide the service via the Internet to large organisations and businesses.
Yahoo rival Google has also recently begun offering a hosted email service to businesses, as part of its Google Apps product. The service provides businesses with email services through the Internet, rather than requiring them to maintain their own servers on site.
Yang called for a strategic reorganization in July, in an effort to help Yahoo better compete with Google and other rapidly-growing Internet companies. Yahoo says that Zimbra "will help Yahoo to expand its presence in universities, businesses and through [Internet service providers]."
Zimbra also offers customizable features such as calendars and contact lists. Yahoo says that it currently has 250 million users worldwide of its email service. Following the acquisition, Zimbra will become a Yahoo subsidiary.
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