Why Yahoo Buying Xoopit Is a Smart Move

27 thoughts on “Why Yahoo Buying Xoopit Is a Smart Move”

  1. I agree that this is playing to Yahoo’s strengths and at this point, what else can they do. After blowing a ridiculous deal at $35 a share with Microsoft (trading around $17 a share) they’ve been losing talent like rats off a sinking ship. Any influx of new blood is a good thing for Yahoo IMHO.

  2. It’s a brain-dead idea to buy Xoopit. (I use xoopit in gmail — sometimes)

    Yahoo should work the heck out of their engineers to put together a simple solution at 1/20th of the price and in a few months too. They already have all these assets all their customer’s email.

    What’s so hard about putting a little [share] link beside your attachments? Or even automatically archiving them and creating a simple interface around browsing all your attachments? I don’t get it. I really don’t. As an engineer, I know that this is not a hard problem. They have the scale, they already store the attachments. Have they forgotten how to innovate and move relatively quickly?

    I’m just glad I moved away to gmail a few years back.

  3. Does this acquisition spell the end of development on Xoopit for Gmail? Yahoo! may decide they do not want to continue improving a competitor’s e-mail product.

    It looks like an interesting product, I haven’t tried it yet. Now that Yahoo! owns it, I doubt that I will try it since I don’t want to get used to it then find it discontinued for Gmail.

    1. Will

      Given that Yahoo is supporting other services on its “home page” I am hoping that they don’t discontinue this service. I am with you — this will leave me in a terrible position as well and as a result I am hesitant to invest more in this service. Yahoo is a rational company and I think they are going to make the right decision on this one.

      Fingers crossed

  4. I completely agree with Ericson Smith. This could have been done at a fraction of the cost by Yahoo. Why do they employ all those engineers anyway?

    This is the kind of “deal” that fully demonstrates what a bunch of clueless morons run Yahoo. They blew $320+ million CASH on Zimbra; much of the talent has already walked, with no integration in sight. Now another $20 million blown and here is my prediction: before you see any of these features in Yahoo Mail, the “talent” would have walked.

    Yahoo is running bailout program for VCs – that’s all there is to it.

    1. Good point… the point is that it wasn’t done. I think getting things done is a big challenge for Yahoo, as I pointed out in my post. They are a bureaucratic mess and the only reason they bought this is to speed up things. They certainly had the time to get it done for a long long time… but decisions by committee lead to Soviet Union.

      On Zimbra, we should talk. you want to email me? Use the form and I will hit you back.

      1. I second the opinion of ‘engineerdude’. It is a disastrous waste of money on things that are trivial. Xoopit doesn’t add anything that could be valued at $20 million. Hiring 10 really smart engineers and paying them $500K would have gotten similar things done in six months. It is this kind of wasteful spending that has left yahoo in current situation. Afterall, xoopit isn’t more than a feature which can easily be replicated by inhouse engineering team.

  5. I agree with the various comments that buying companies with “simple” technology you want but can’t manage to build yourself is a sign about the state of your world. AOL did this repeatedly and had little / no success in integrating.

    On the pricing side of the discussion, I think that buyers have finally started to figure out whether they’re buying a startup that actually has a BUSINESS or whether they’re buying one that has a FEATURE. There are SO many startups that are the latter… a good idea (even a REALLY good idea) that will never amount to anything more than a feature embedded in some other product. They can’t possibly be worth what the former group are.

  6. Agree with Om, getting things done was a challenge for yahoo as is for any big company. Due to their size, politics, inter-team bickering, bureaucracy it just becomes all the more difficult to innovate. Its been pointed out in the write-up as well – that the challenge still remains to integrate the product into yahoo’s stack.

    Thats why you see most big-sized companies growing in-organically – IBM, Google, MS are few examples. Its not about not having the engineering brain to build a product, its about bringing the right people together and building a product, thats where startups excel.

    In any case xoopit seems like a great team and a good product, wish them all the luck with yahoo.

  7. Guys we have a post coming up which will explain why Xoopit technology isn’t as simple as it seems. I think most people are missing out on the big picture here: it this company and its core technologies helps Yahoo deliver better email experience, then it should.

    If they got an internal team to do this it would still take time. If there is a problem then that is of management and people in charge. They should have seen the big changes coming two years ago and built towards this. Starting now it would not be that easy.

    1. Hmmm…

      1. You extract all the attachments from emails
      2. You tag them by source, and other tags and meta information found in the email itself
      3. You can filter the attachments by source, date, tags
      4. You can show all photos by date, source, person, tags
      5. You can share photos with friends
      6. Yahoo can pull together galleries of photos with same meta info/tags if users give green light

      In fact Xoopit is less efficient and vastly slower than if Yahoo did it themselves, because they have to login to the email account and download then process the mail (see integration with gmail). Yahoo has access to all of it already, making the job vastly easier and orders of magnitude faster. Their database simply has to point to the existing attachments, since Yahoo already hosts all those attachments on their clusters.

      Potential issues? Scaling (yahoo does that). Servers? (yahoo has those). Front end to browse photos — easy to build. Database to store photos (easy also). Search engine? (yahoo does that well enough).

      Not sure if there is more to it than that, but I await with interest and will gladly say so if I’m proven wrong.

  8. I agree with Eric Smith. Xoopit is hard to implement as a firefox plugin from an engineering perspective — but it could be way easier for email providers themselves to do so.

    The only question we raise here — why Xoopit worth $20 million? I think Yahoo should invest in Xoopit instead of take it all.

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