Yahoo to Acquire Xoopit for About $20 Million
Yahoo plans on announcing Thursday that has bought Xoopit for a price in the $20 million range, according to several sources, one of its first acquisitions in a long while. — Reached late this afternoon by BoomTown, a Yahoo (YHOO) …
Context & Ripple Effects
Yahoo had previously pursued a broad Web 2.0 acquisition strategy in its earlier Web 2.0 purchase. Against that backdrop, the reported Xoopit deal would return Yahoo to buying a narrowly focused product rather than building every mailbox feature internally.
Xoopit already integrates with Yahoo Mail to organize photos accumulating in inboxes, while Yahoo had rolled out a redesigned home page two days earlier. The reported deal would extend Yahoo's product renovation into the mail experience.
First-order effects
- If confirmed, Yahoo would bring Xoopit's photo-organization capability into its Mail product and acquire the team behind an existing Yahoo Mail integration.
- Xoopit's standalone product and employees would shift from serving Yahoo as an integration partner to operating within Yahoo.
Second-order effects
- Yahoo Mail competitors would face added pressure to make inboxes useful for managing stored photos, not merely sending and receiving messages.
- The deal would give Yahoo a faster route to differentiate Mail through specialized software, reinforcing acquisition as an alternative to internal feature development.
Third-order effects
- If Yahoo continues to buy adjacent consumer-web tools, large portal companies may increasingly use small acquisitions to refresh established products and absorb specialist teams.
- The transaction points to email evolving from a communications service into an interface for organizing personal media and other inbox-held data.
The trend: Consumer internet platforms are using targeted acquisitions and integrations to add organizational features to mature communication products.