Yahoo Adds Zimbra to the Garage Sale as It Tries to Shed What Isn't "You!"

Published on September 21, 2009
by Kara Swisher


According to numerous sources, Yahoo has been shopping around Zimbra, the open-source email company it bought in late 2007 for $350 million.

Zimbra is only one of the many assets of Yahoo (YHOO) that are now on the block, including its personals business, its HotJobs online classified unit and many more to come, said sources.

The effort to unload Zimbra is yet another sign that the company is trying to slim down its diverse portfolio, even as it strives to redefine itself this week with a new, pricey marketing campaign that seeks to position Yahoo primarily as a consumer company.

As first reported by BoomTown last week, Yahoo will be introducing a massive branding campaign tomorrow on the second day of Advertising Week in New York.

The new focus Yahoo is aiming for with advertisers is to stress its huge size and scale with consumers. The troubled Internet giant is still one of the most trafficked sites on the Web.

And consumers will also be reminded of this. The Wall Street Journal wrote a follow-up story yesterday on the marketing effort, noting that the $100 million campaign’s tagline is “It’s You.”

Get it? The “Y” in Yahoo is the same as the one in You!

The details of the plan will be made public tomorrow at a press conference immediately after a keynote speech–titled “Yahoo’s Consumer Revolution…Round II”–that the company’s new CMO, Elisa Steele, is set to deliver at the Interactive Advertising Bureau’s MIXX conference.

The goal, said several sources at Yahoo, will be to stress Yahoo’s consumer business over all others, which are supported mostly via brand advertising, leaving more extraneous ones out in the cold.

Which is why Zimbra–like a lot of other Yahoo properties–is being shopped around by its top mergers and acquisitions exec, Greg Mrva and others.

(Mrva’s new job title should be: VP of un-mergers and de-acquisitions.)

Backed by Benchmark Capital, Redpoint Ventures and Accel Partners, Zimbra was an innovative start-up whose main business was to provide clients–including Comcast (CMCSA), many ISPs and a number of colleges–with white-label email software capabilities.

Yahoo bought the company to goose that business, whose main rival has been Google (GOOG)–along with using Zimbra technology to improve its massive consumer email offering, also under siege from Google.

That integration has gone slowly, and Yahoo now has less interest in selling email products to others.

But the price Yahoo would get, many think, would be significantly lower that what it paid for Zimbra.

Nonetheless, potential buyers include Comcast and Google, as well as private-equity investors.

In addition, it is not out of the question that its former venture investors could be interested in a classic Silicon Valley buyback.

Zimbra’s founder and CEO, Satish Dharmaraj, who left Yahoo earlier this year, is now working at Redpoint.

Here is a video interview I did with Dharmaraj in early 2008, after the Yahoo deal was struck:

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