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Yahoo! is to pay roughly $350m for Zimbra, a San Mateo, California company that specializes in open-source email and collaboration software. It looks like Yahoo! plans to use Zimbra's new-age Exchange competitor to "expand its presence" in universities, businesses, and ISPs.

"Zimbra's tremendous talent and innovative technology will help to extend our core Mail offerings, further strengthening our strong leadership position in this space," said CEO Jerry Yang in a canned statement. "Additionally, Zimbra's successful relationships with large ISPs are key as we expand our worldwide partner network and continue to focus on our commitment to being the partner of choice."

In announcing the proposed acquisition on the official Yahoo! blog, Yodel Anecdotal, senior vice president for communications and communities Brad Garlinghouse said that Yahoo! is "constantly being approached" by universities, businesses, and ISPs seeking "expertise in email and communications". And if it completes the deal for Zimbra, it won't be nearly as tongue-tied.

As Garlinghouse points out, Zimbra is already used by organizations like Digg, Mozilla.org, and the Atlanta-based university Georgia Tech. "Combining the best of Zimbra with what's made Yahoo! Mail the top dog in web mail will not only allow us to cater to these markets better than anyone, it will allow us to expand our presence to partners and consumers at school, work, and home," the VP enthused.

It's the same old story, really. Yahoo!'s trying desperately to keep up with Google. The Mountain View, CA outfit has already made in-roads with universities and businesses thanks to Google Apps, the online suite that includes tools like Gmail, Google Calendar, and Google Docs & Spreadsheets.

Yes, the Zimbra Collaboration Suite (ZCS) is an Exchange competitor, allowing organizations to host their own messaging and collaboration goodies, including email, contacts, shared calendar, search, VoIP, and document authoring tools. But unlike Exchange, the AJAX-based suite serves things up to ordinary web browsers.

According to a blog post from Zimbra co-founder and CEO Satish Dharharaj, who will report to Garlinghouse and lead the Zimbra team from Yahoo!'s Sunnvale headquarters, the company will continue to offer ZCS as server software.

"The Zimbra team will report to the [Yahoo!] communications group where we will remain fully committed to the community and to our customers and partners while leveraging opportunities to enhance their current experience," he wrote. "We will continue to make our software available for download and continue to offer Zimbra software and support as usual."

But it also looks like Yahoo! will roll certain pieces of Zimbra into its existing web-based tools. "Zimbra offers incredible technology. We see great opportunities to incorporate some of their best-of-breed features (I really like their calendaring) into Yahoo!'s industry-leading communications products," Garlinghouse continued. In addition to Zimbra Calendar tools, the Yahoo! VP is giddy over "Zimlets", the Zimbra mash-ups that integrate the suite with all sorts of other web services.

Most importantly, Garlinghouse pointed out that Yahoo! is finally on the verge of purchasing a company named for a Talking Heads song. ®

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