Yahoo! pockets Zimbra for $350m

Yahoo! is buying email software provider Zimbra for about $350m, the companies announced.

Zimbra offers branded email with calendar and mobile features as well as the ability to work offline. The company has more than 200 educational, business and ISP partners, including Comcast, which offer branded email service to roughly nine million subscribers.

What differentiates Zimbra are the "Zimlet": web service mash-ups that offer richer functionality in email. For instance, people can simply mouse over airline flight information in an email to check on flight status. Users are also able to track FedEx deliveries and get maps, stocks and other information in email too.

The Zimbra acquisition, which is expected to be completed by the end of the year, and Yahoo!'s $300m purchase earlier this month of display ad provider Blue Lithium are an indication of the future direction of the company as it redefines its place in the market, says Brad Garlinghouse, senior vice president for communications and communities.

He said: "They illustrate the commitment to areas we feel are core strengths."

Elinor Mills writes for CNET News.com