Yahoo selling e-mail service Zimbra to VMware

January 13, 2010

(AP) -- Yahoo is selling the e-mail service Zimbra to VMware as part of an effort to focus on the Internet services that generate most of its revenue.

Financial terms of the deal announced Tuesday weren't disclosed.

Yahoo, based in Sunnyvale, Calif., bought Zimbra for $350 million in September 2007.

Zimbra manages more than 55 million e-mail boxes for businesses, universities and Internet service providers.

The acquisition opens a new product line for VMware, which sells software that enables a single computer to function like multiple machines.

is retaining the right to draw upon Zimbra's technology to run its own Web-based e-mail service.

The sale is expected to close by the end of March.

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