On 22 July 2009, Yahoo acquired Xoopit, a small Silicon Valley company that enables users to aggregate social media — photos, links, videos — from multiple social sites into their Gmail or Yahoo Mail inboxes and then easily share that content with friends. The core technology is a Hadoop-based indexing service that finds and collates media from e-mail-embedded URLs. Terms of the deal were not disclosed, but the purchase price has been widely reported to be in the $20 million range.

With approximately 285 million active users, Yahoo Mail is the leading consumer e-mail service. For many of these users, e-mail has become the common repository for all social interactions from a variety of sites, such as YouTube, Facebook, Flickr and Shutterfly. But users are struggling to organize and share all the links and media flooding their inboxes — a problem not dissimilar to e-mail overload encountered in the business world. By enabling users to easily organize all social media, Yahoo intends not only to solve this user dilemma, but also to put itself at the center of users' social activities.

The Xoopit purchase underscores Yahoo’s strategic endeavor to add a social component to each of its services. The commitment is evident in its newly redesigned homepage, which allows consumers to integrate social sites such as Facebook and Twitter with core Yahoo content and services. The ability to integrate Xoopit with other Yahoo elements moves the company closer to its goal of becoming a social portal — an area in which it has lagged. Gartner also expects Xoopit to be integrated into Yahoo's commercial Zimbra e-mail service.

The Yahoo acquisition demonstrates the continued primacy of e-mail as the communication vehicle of choice, despite rumors of its demise. E-mail is likely to become a point of aggregation for social media, rather than to be replaced by social media. The Xoopit buy also hints at the emergence of a next generation of collaboration services, which is characterized, among other aspects, by the integration of multiple forms of interactions from a variety of vendors — as exemplified by the recent Google Wave announcement.

• Social networks: View this purchase as a major commitment toward transparent integration across Yahoo’s ecosystem.
• Enterprises: Continuously look for ways to help users overcome e-mail overload issues.

• “E-Mail Efficiency Client Add-Ins: Worth the Money?” — Plug-in software for e-mail clients promises to help solve e-mail overload and create in-box efficiencies by extending the functionality of the e-mail client. While they can offer benefits, deployment must be controlled. By Matt Cain
• “Vendor Rating: Yahoo” — Gartner rates Yahoo’s abilities as a vendor of individual product and service lines. By Allen Weiner and others

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This research is part of a set of related research pieces. See Roundup of E-Mail Research Through 3Q09 for an overview.