Breaking: Yahoo Acquires Zimbra For $350 million in Cash

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Yahoo will announce the acquisition of open source online/offline office suite Zimbra this evening, we just heard through a very solid source. The price: $350 million, in cash, confirmed.

Our coverage of Zimbra goes back to 2005. They gained wide exposure at the 2005 Web 2.0 Conference. Recently they launched offline functionality.

The company has raised $30.5 million over three rounds of funding from Benchmark Partners, Redpoint Ventures, Accel Capital, Sumitomo and Duff, Ackerman & Goodrich. They announced 6 million paid mailboxes back in March, and more recently inked a deal with Comcast that brings another 12 million potential subscribers.

This was a very, very smart acquisition. In one quick move Yahoo is now in the race with Google for the next generation online/offline office suite. I would not be surprised to see them pick up Zoho next. That is, if they really want to dominate own this space and be a credible threat to Google Docs.

Update: Here is the Yahoo press release and Zimbra CEO Satish Dharmaraj’sblog post on the acquisition. And here’s the Yahoo official blog post.

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