The real reason Yahoo bought Xoopit: Gmail data intelligence

I don't see any reasonable reason why Yahoo would pay so much for a browser plugin for your email. Today Yahoo is supposed to have bought Xoopit for 20 million dollars. I personally like Xoopit. Although i stopped using it. Was too slow and not performing well enough.

I do believe our mailbox will become more social and that eventually webmails will offer what Xoopit was trying to do but without plugin, So the move by Yahoo makes sense in a way.

But Let's be clear a browser plugin is definitely not the way to make a service become mainstream. Xoopit has at best 100/200k active users which is nothing compared to the massive 200 million Yahoo mail users. Xoopit is far from perfect and is not really making money.

So why Yahoo did buy this company? Not for a service they could create in 3 months. Social connectors are easy to add, just like they did to their new Yahoo homepage. Maybe for the team which seems to have a good sense of execution even though the product is not perfect. Not for the revenue and not for the active user base.

The real reason is because of Data intelligence about their damn competitor Google. Xoopit was mainly used by Gmail users because this is where it was adding most value. For Yahoo Xoopit is a mining source of information on how Gmail users are using email and how to improve Yahoo mail which looks real pale compared to Google service.

This being said, i think this is a lot of money for intelligence. I think they just did not want Google to get Xoopit and paid a premium for it too.

PS1: unlike Techcrunch i don t think Google let this deal go. I think they just came to the conclusion they will do it by themself for much less (probably by Gmail labs)

PS2: from a VC point of view Xoopit is a big fail. The company raised 6.5m USD in 2 rounds. It was obviously a fire sale. I assume the deal was not paid in cash for most of it and i assume VCs would not be so happy with Yahoo stock right now, specially when you expect at least a 5X return minimum. Xoopit was sold because maybe the investors did not see any clear business potential in it.

 
Technorati Tags: xoopit gmail mail yahoo google