Yahoo! Announces Agreement to Acquire Zimbra

September 18, 2007; 03:07 AM

SUNNYVALE, Calif.--Yahoo! Inc. (NASDAQ:YHOO), a leading global Internet company, today announced that it has entered into a definitive agreement to acquire Zimbra, Inc. (www.zimbra.com), a leader in next generation e-mail and collaboration software. Under the terms of the agreement, Yahoo! will acquire Zimbra for approximately $350 million.

“Our industry-leading communications products, including Yahoo! Mail, are critical to the future growth and success of Yahoo!,” said Jerry Yang, chief executive officer, Yahoo! Inc. “Zimbra’s tremendous talent and innovative technology will help to extend our core Mail offerings, further strengthening our strong leadership position in this space. 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.”

The acquisition of Zimbra will help Yahoo! to expand its presence in universities, businesses and through ISPs by enabling organizations to host e-mail on or off premises with their own domain. Zimbra’s offerings include rich, AJAX-based e-mail, calendar, and contact management features that can be used both on and offline. Their open platform enhances the user experience by enabling creative mash-ups called Zimlets that tie in valuable Web services to e-mail, and can be tailored to fit the needs of every customer.

“We are excited to combine ourselves with one of the world’s most successful Web mail services and extend Yahoo!’s credible brand and leadership in the e-mail business to universities, businesses and ISPs globally,” said Satish Dharmaraj, Zimbra co-founder and CEO. “With Yahoo!’s ad and content network, the possibilities for Zimlets and other applications are endless.”

Yahoo! Mail celebrates its 10^th anniversary this year and continues to be one of the world’s most popular Web mail services with 250 million(1) users worldwide. The service provides people with more ways to connect to their friends and online contacts and is fully integrated with Yahoo!’s many other popular services to make it easy to access all the Internet services people need.

“As an industry leader, we are constantly approached for different e-mail solutions,” said Brad Garlinghouse, senior vice president, communications and communities, Yahoo! Inc. “With Zimbra, we will bring the security, reliability and anywhere access of Yahoo! Mail to people at school, work and home, further enhancing our leadership position in Web mail.”

Following the acquisition, Zimbra will become a wholly-owned subsidiary of Yahoo!. Satish Dharmaraj will continue to lead the Zimbra team based in Yahoo!’s Sunnyvale headquarters and will report to Brad Garlinghouse. The transaction is subject to customary closing conditions, including regulatory approval. It is expected that the transaction will be completed in the fourth quarter of 2007.

About Yahoo!

Yahoo! Inc. is a leading global Internet brand and one of the most trafficked Internet destinations worldwide. Yahoo!'s mission is to connect people to their passions, their communities and the world's knowledge. Yahoo! is headquartered in Sunnyvale, California.

About Zimbra

Zimbra is a leading provider of collaboration software for universities, businesses and service providers. Zimbra's rich AJAX interface is available on or offline to dramatically improve the collaboration experience. Zimbra is available on-premise or on-demand through our extensive hosted partner program. More information at http://www.zimbra.com/.

(1) According to comScore World Metrix, July 2007

This press release contains forward-looking statements that involve risks and uncertainties concerning Yahoo!’s proposed transaction with Zimbra (including without limitation the statements contained in the quotations from management in this press release), as well as Yahoo!’s strategic and operational plans. Actual events or results may differ materially from those described in this press release due to a number of risks and uncertainties. The potential risks and uncertainties include, among others, the possibility that the transaction will not close or that the closing may be delayed; and that the anticipated benefits to Yahoo!, customers and users may not be realized. More information about potential factors that could affect Yahoo!’s business and financial results is included under the captions, “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations,” in the Company's Annual Report on Form 10-K for the year ended December 31, 2006 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2007, which are on file with the SEC and available at the SEC's website at www.sec.gov.

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