Yahoo rumored to be selling Zimbra

The Wall Street Journal reports that Yahoo is considering selling off its open source e-mail system

Kara Swisher of the Wall Street Journal's All Things Digital blog reports that Yahoo has been in discussions to sell Zimbra, its open source e-mail system, as well as the HotJobs online recruiting site. Yahoo acquired Zimbra two years ago for $350 million. The Zimbra team was successfully integrated into Yahoo and has continued growing at a rapid clip.  But applications may no longer be core to Yahoo's new strategy to focus as a media company.

[ Also on InfoWorld: "Disruption as a business strategy" | Stay up to speed with the open source community via InfoWorld's Technology: Open Source newsletter. ]

While some might view this as a sign that the acquisition didn't work, I don't think that's the case here. From what I've heard, Zimbra's execution, growth, and profitablity have been fantastic. Instead, I think it's a sign that CEO Carol Bartz is making the kind of strategic decisions that Yahoo should have made long ago to focus on a small number of initiatives. Given how much revenue Yahoo is making as a media company, the revenues from Zimbra are likely too small to matter, even with above-average growth.

If Zimbra is cut loose, I bet that it can accelerate its growth with a very modest investment. Zimbra has a great product line that can continue to disrupt the corporate e-mail market, and it's only become better in the last two years. Zimbra could be a successful stand-alone business, or it could set off a wave of open source application consolidation.

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