Yahoo! Acquires Group E-Mail Provider

Yahoo! Inc. Wednesday bought group e-mail provider eGroups Inc. for $428 million in stock.

Yahoo! will issue more than 3.4 million shares of common stock in exchange for all outstanding shares, options and warrants of eGroups. The acquisition, which is subject to the approval of eGroups’ stockholders and regulatory approval, will be accounted for as a pooling of interests and is expected to be completed in the third quarter.

Yahoo!, who kicked off the week by unveiling its corporate portal initiative, adds a leading provider of group e-mail communications with the eGroups acquisition. In conjunction with Yahoo! Clubs, Yahoo! Mail and Yahoo! Messenger, the deal points to the portal giant’s strategy to become a leading communications provider on the Net.

Yahoo! also plans to integrate this service into Corporate Yahoo!, a customized enterprise information portal strategy launched Monday.

Jeff Mallett, president and chief operating officer of Yahoo!, said the purchase was a result of the rising number of users requesting group e-mail technology.

“In addition to an established global presence, eGroups has amassed 17 million loyal members who have created more than 800,000 active email groups,” Mallett. “We are looking forward to introducing Yahoo!’s personalized, integrated services to eGroups’ community of worldwide users.”

With its announcement of Corporate Yahoo! Monday, the titan trumpeted its presence in the enterprise portal sector, which is expected to grow by more than $10 billion of the next few years, according to some analysts.

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