Of course, Google and Microsoft both have online/offline office suite applications. This acquisition may help Yahoo compete in that space.
Jerry Yang, chief executive officer, said:
Our industry-leading communications products, including Yahoo! Mail, are critical to the future growth and success of Yahoo. Zimbra’s tremendous talent and innovative technology will help to extend our core Mail offerings, further strengthening our strong leadership position in this space. Additionally, Zimbra’s successful relationships with large ISPs are key as we expand our worldwide partner network and continue to focus on our commitment to being the partner of choice.
There is a ton of coverage at Techmeme on the Yahoo news.