Yahoo buys web email company Zimbra

$350 million purchase sees Yahoo get access to web email technology currently used by universities, ISPs and many mid-size businesses.

Yahoo appears to have plans for expanding its already vast 250 million Yahoo Mail user-base by purchasing Zimbra, a maker of open source software for web-based email, for $350 million (175 million) in cash and stocks.

Zimbra, based in California, produces email software used by more than 1,300 universities, internet service providers and small and medium size businesses.

The four-year old start up provides its nine million paying customers with an email account and similar utilities such as group-calendars and document-sharing offerings.

"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 Jerry Yang, chief executive of Yahoo.

The move not only shows Yahoo's desire to cement its place as a leader in email, but to stay on par with its rivals Microsoft and Google, the latter recently announcing the launch of a web-based presentation application that will compete with Microsoft's PowerPoint software.

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