Kara Swisher

Recent Posts by Kara Swisher

Yahoo's Brad Garlinghouse on the $350 Million Zimbra Deal

Another day, another scoop we try to serve up honestly on BoomTown!


Yesterday, we broke the first news of the acquisition of Zimbra by Yahoo, after we had the first scoop last week of Yahoo’s purchase of BuzzTracker.

Those Yahoo dealmakers are certainly busy these days and we will continue to watch them oh-so-carefully.

Until then, here’s more info on Zimbrafest:

First, the $350 million deal between Yahoo and the open-source email and calendaring provider has been a long time coming, much earlier than just the summer time frame Yahoo’s Brad Garlinghouse has said in a number of interviews I have read on the Web.

While the Yahoo senior vice president also has said he was blown away by the company when it first came onto the scene several years ago, according to sources close to the deal team at Yahoo, Zimbra has been in its sights since well before former CEO Terry Semel left the company. Apparently, Yahoo’s always careful (some say glacial) decision-making caused the slower pace.

Nonetheless, the high price (well above the valuation of Zimbra in its last round of funding) was certainly a bold move for Yahoo, especially coming after the $300 million deal to buy behavorial ad network BlueLithium earlier this month.

Both deals are signs that Yahoo understands it has to double down in areas it dominates clearly, like in display advertising and, of course, mail. Yahoo’s consumer mail product is a powerful one and its recent iteration has gotten a lot of kudos (like those from Walt Mossberg here).


The deal takes Yahoo’s offerings up a notch in the innovation arena, where Zimbra has been doing a lot of cool user interface and other stuff, such as its nifty “Zimlet” widgets.

In addition, it also drops Yahoo right into the commercial space, where Google has been plowing, given Zimbra’s own inroads in the university, business and ISP markets.

I am sure there will be a lot to complain about going forward (the will-Yahoo-ruin-the-sassy-little-Zimbra seems to be the refrain in some posts on the Web). But let’s just say for now that this hefty buy might make a nice fit at Yahoo.

To explain why, here’s a lovely video we shot of Garlinghouse talking about the deal, while in the atrium of San Francisco’s Palace Hotel at the TechCrunch40 conference. He discusses the deal, as well as what he thinks is over- and under-hyped.

And because we hate to see him grimace when we do, we did not mention his (in)famous “Peanut Butter Manifesto” in the video, even though we were totally thinking about it. (Sorry, Brad!):

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— Valleywag editor Sam Biddle