Yahoo paid $350 million for Zimbra in 2007. Now only three years later, VMware is expected to pay a mere $100 million for the Zimbra messaging and collaboration technology and intellectual property.
The Zimbra unit employs 100 people at Yahoo and services 55 million mailboxes.
But this deal is all part of Yahoo's new management central strategy which is rather than looking for companies and technology to purchase, Yahoo management is in a process of "de-acquisition."
According to a Dow Jones Newswire report, Yahoo's new management team is selling off chunks of the company "that are not central to the strategies of its new management."
Yahoo will be able to continue using Zimbra technology for their mail and calendar applications.
VMware, which is majority owned by EMC Corp., has been focused on virtualization technology. But with the purchase of Zimbra, the company is expected to step up its efforts to carve out their space in the cloud computing arena.