Yahoo is set to announce the sale of its Zimbra open-source email unit to VMware tomorrow, said sources, for a figure that is north of $100 million, but below the $350 million it paid for the unit in late 2007.
A week ago, BoomTown reported the sale of the unit was likely.
Sources said there is a large employee retention element to the sale, so Zimbra’s talent will move to VMware, as well as full retention of intellectual property by Yahoo of technology used in its email products. There will be ongoing IP giveback to VMware (VMW) over a period of time.
In addition, other sources said that Yahoo (YHOO) is about to consider bids it has solicited for its small business unit, which it has also been trying to sell for some months.
Sources added that Yahoo will not sell the unit if it can’t get a decent price of the division, which is estimated to be worth many hundreds of millions of dollars.
BoomTown reported in late September that Zimbra was for sale by Yahoo, which has been targeting assets for “de-acquisition” that are not central to the strategies of its new management.
Late last year when announcing its new $100 million marketing campaign, Bartz said at a media briefing: “Most of our assets are very core to the company. Those that aren’t, where it makes sense we will sell and where it makes sense we will shut down.”
Yahoo has done that with several properties, such its JumpCut video editing service.
But Zimbra, as well as its small business and jobs sites have been on the block.
One source noted that the reason that VMware was interested in nabbing Zimbra was that its execs want to
expand “up the stack” from the Silicon Valley software company’s position in virtualization.
And Yahoo is now not interested in running Zimbra’s white-label, open-source email commercial product, which serves the university and ISP markets. There, its main rival has been Google (GOOG).
Yahoo declined to comment, and VMware has not replied to an email query.
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