Yahoo acquires smart email service Xobni

• 
  Warwick Ashford

  Senior analyst
• Published: 04 Jul 2013 8:47

Yahoo continues down the acquisition trail with a deal for smart email service Xobni, hot on the heels of another multi-million dollar deal for Qwiki, maker of an iPhone short movie app.

Together, the deals are believed to be worth up to $90m, with Xobni pegged at $30m to $40m and Qwiki at $40m to $50m.

Yahoo has made several acquisitions since CEO Marissa Mayer took up the challenge of turning Yahoo around and winning back advertisers and users lost to rivals Google and Facebook.

Since Marissa Mayer’s arrival at yahoo in July 2012, the internet company has acquired several startups, but most of these have been aimed at expanding its mobile offerings.

Unlike deals for Alike, Stamped, Snip.it, Summly, Tumblr and Bignoggins Productions, buying Xobni will bolster Yahoo’s mainstream email service.

Mayer sees Yahoo Mail as an important way to acquire and retain users. She has already overseen a revamp of the service and the release of new versions for mobile devices to win back lost ground.

Xobni – which reorganises email according to the user’s social contacts – will give Yahoo new features and human talent to make Yahoo Mail more attractive, according to the Guardian.

Mayer will also have to address security concerns around Yahoo Mail after BT dropped the service for its six million broadband customers, because of complaints about hijacked accounts.

An email security company may be next on Yahoo’s shopping list.

Announcing the deal, Xobni said users will receive the same service until July 2014, although paid premium services will be dropped and eventually Xobni will be "baked in" to the Yahoo email service.

Xobni staff have been relocated from San Francisco to Yahoo's headquarters in Sunnyvale, including Xobni's chief executive Jeff Bonforte, a former Yahoo employee.

In addition to the slew of acquisitions and Yahoo Mail updates, Mayer has overseen an update of Yahoo’s homepage and a revamp of its Flickr photo sharing platform, acquired in 2005.