All Things Digital

An unusual Israeli-Palestinian joint venture start-up, which makes a cloud-based Web operating system letting users access their desktops from any computer with an Internet connection, is alleging a trademark violation by Microsoft in its new $300 million advertising campaign.

G.ho.st, which stands for “Global Hosted Operating System,” is claiming it has a pending trademark registration for the tagline “no walls.”

G.ho.st has used the phrase for almost 18 months and is alleging that it pertains specifically to operating systems (as shown in the screenshot here).

In a letter sent earlier this week to Microsoft CEO Steve Ballmer and many others, which BoomTown has obtained, G.ho.st CEO Zvi Schreiber claims that the software giant has violated G.ho.st’s pending trademark for the ad phrase “no walls” and asks Microsoft (MSFT) to remove it from the company’s marketing materials.

Microsoft’s advertising campaign, which launched this month and had a rocky start with poorly received commercials featuring comedian Jerry Seinfeld and Microsoft Founder Bill Gates, uses the taglines “Imagine No Walls” and “Life Without Walls” to tout its Vista operating system. (See a screenshot of one example below; click on it to make it larger.)

G.ho.st, which is hosted by Amazon (AMZN), is yet another of many attempts to make cloud computing real and is competing to grab customers from the software-based Windows powerhouse.

A Microsoft spokesman, in an email to me, dismissed G.ho.st’s claims.

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When Yahoo holds its first board meeting tomorrow–with three new board members, including shareholder activist Carl Icahn–there will be little time for getting-to-know-you chitty-chat.

In fact, it should be all business for the group, which needs to push the reset button hard for Yahoo.

Definite topics: the progress of talks to buy AOL from Time Warner (TWX)–probably Yahoo’s most attractive option, if it can get a good price–and which are more serious than has been reported; whether the company has any strategic interest in making up with Microsoft (MSFT) after a year of acrimony; how the company can attract new top-level talent to reinvigorate itself; how to make nice with disgruntled major investors; and, of course, how to react to the troubled economy, which is sure to impact the advertising business.

In fact, Yahoo (YHOO) CEO Jerry Yang is acutely aware that he and his management team have only a few months to really show investors and employees that they can get things moving at the beleaguered company.

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Yahoo will begin testing out versions of its new main homepage to a minuscule number of users starting tomorrow, employing a design that more significantly allows users to customize the starting page in a way that essentially amounts to a kind of My Yahoo-lite for everyone.

The redesign is a huge and complex endeavor. According to comScore’s July stats, Yahoo (YHOO) has about 82 million daily U.S. visitors to its homepages.

Most of those visitors use the Yahoo main homepage, which is fully programmed by the company.

Making such a shift will also be a big perceptual deal for Yahoo, which needs to prove it has remained current and open, especially compared to faster-growing rivals like Facebook.

Yahoo has been trying to reinvigorate itself of late, after a disastrous takeover battle with Microsoft (MSFT) and a weakening of its business and its stock price.

Because of all this, the Yahoo brand has also doubtlessly been tarnished.

Thus, making a success of its new design is critical, and Yahoo’s CEO Jerry Yang has been touting the idea that Yahoo must be the “starting point” to the Web for users.

To respond to users who want to access information and services more quickly, the new streamlined homepage will be much shorter, be made up of more “snippets” and have links to outside email providers (initially, Google and AOL).

Most importantly, the new homepage will prominently feature a left-hand vertical bar, which has applications from both Yahoo properties and third-party services like eBay.

These apps can be added and subtracted easily. Eventually, there will be thousands of apps, from Yahoo and, after vetting, from outside developers.

(See screenshots below comparing the old Yahoo with three of the new ones.)

The changes will initially impact less than one percent of worldwide users in the United States, the United Kingdom, France and India. But they will be rolled out to a wider and wider circle over the next six months.

“People want broadcast and narrowcast at the same time,” said Tapan Bhat (pictured here), Yahoo’s SVP of Front Doors, Communities and Network Services, in an interview with BoomTown. “They want choices, but they also don’t want to do the work involved [in programming their own homepage].”

Thus, Yahoo apparently is going to give users both in its first major redesign since 2006, which it has been working on for two years.

The major components of the page will still remain close to the old one, but jazzed up and shifted around.

For example. the apps will be moved into the position where Yahoo services links used to be, and vice versa.

As before, there will be a main information module at the center of the homepage, “pulse” and news area on the bottom-right and -left, and search and navigation at the very top.

Bhat said the changes were made after a lot of research of user behavior and also after paying attention to key trends such as the widgetization of applications and the trend toward openness.

The new look is not aimed at the hardcore user, who might want to endlessly tweak the Yahoo homepage, although those options will remain for those who prefer them.

But, Bhat said, more people wanted quick access to things like email without having to launch apps. Instead, users will be able to see it all on the main page.

“It is not a dashboard approach of My Yahoo or iGoogle,” he said. “People are time-starved … so it is important to the user to get to their relevant daily information as quickly as possible without having to click around.”

Bhat said the rollout tomorrow will not be final and that Yahoo will keep making changes, depending on reaction.

“We don’t want 300 million people opposed to change,” said Bhat, who wrote a blog post on the changes here. “So, we are going to be listening hard.”

Here are screenshots (click on images to make them larger):

This is the home page that will be rolled out tomorrow

This is a home page that includes more outside apps

This is the home page that shows how email from Yahoo and Google and AOL would look

This is Yahoo’s current home page, as of tonight

Okay, BoomTown arrived late to Yahoo’s media event this morning to show off its “open” strategies across its properties (I had a most excellent excuse in that it was my youngest son’s very first day of school).

So, walking in, it was kind of jarring to hear Yahoo Media Group head Scott Moore talking about an email demo that had preceded his presentation–and which he had missed himself–about adding social elements.

“I always think of the media properties as the sexy [part of Yahoo],” said Moore. “But that kind of made mail sexy.”

Sexy email! Yahoo is saved!

Well, the jury is still out on that.

But it was nice to see Yahoo execs actually talking about the various products they’re working on at the troubled company rather than seeing them hide away in fear of questions about proxy fights and hostile takeovers.

That has, of course, been the only story of Yahoo (YHOO) for far too long–about corporate and management turmoil, as well as worrisome stock declines.

Because of that, it is obviously in Yahoo’s best interests to change the narrative and talk about the product innovations it is making to reinvigorate itself.

Thus, Moore (pictured here) showed off a new look for Yahoo’s news properties, including substantially more third-party content integration and interchangeable modules.

It’s not a new idea, by any stretch, but it looks like a good change.

“Our users are in control,” said Moore. “We’re not doing this open thing because it is the flavor of the month.”

Added Moore, co-opting the famous line from country singer Barbara Mandrell: “We were open before open was cool.”

Sexy! Well, not really, but nice try!

Next up, Yahoo U.S. EVP Hilary Schneider on open in advertising and the Google (GOOG) deal.

Although about one-third of its user base–30 million people–has already switched over to its new design, which has been opt-in since July, Facebook will now officially start to move the entire site and the other 70 million Facebookers.

The changeover–which is not optional–will be complete in a few weeks, Facebook said.

I do like the new look, which is definitely cleaner and simpler, although it makes the experience a little more disjointed, since everyone’s profile is now cut up into tabs.

But it is nice to be able to better customize your information via those tabs, and it is easier to navigate (although search on Facebook still stinks, and BoomTown actually looks forward to Microsoft’s attempt to tame this savage beast).

Of course, there have been a lot of complaints from users, and there is even a popular “I Hate the New Facebook” group on the site (natch!).

And not all third-party application developers like it either, including new navigational changes that limit instant user access to as many applications as before.

But that’s life in Zucker-berg!

Over at AOL, a division of Time Warner (TWX), there has also been some primping going on, which includes an interesting integration of popular third-party emails.

Now it is easy to add access to non-AOL email accounts, such as GMail and Yahoo! Mail, which sit right next to AOL Mail at the top of its main AOL home page. (See the image above and click on it to make it larger.)

Other changes are coming soon, all part of AOL’s laudable attempt at openness, to keep its Web site as relevant as possible.

Not that it has a choice. Back in its glory days, AOL was the emperor of the walled garden strategy, which kept users inside well-tended online paths and out of the wilds of the Internet at large.

Which, if you think about it, seems as quaint as the faux political nostalgia around small-town life these days.

But, since you apparently can’t put lipstick on a pig (or a pit bull either!), Green Acres is no longer the place to be in real life or on the Web.

Here’s an email I got from a high-ranking Yahoo (YHOO) employee today after the Microsoft (MSFT) deal was declared dead and the ad-outsourcing deal with Google (GOOG) announced hours later:

“Out of the frying pan, into the fire. At least, the frying pan was a slower death.”

And here’s an email from a major Yahoo investor–no, not Carl Icahn!:

“The Board and Jerry are idiots.”

And those are people who presumably like Yahoo, since they work there and buy its stock.

Well, both got a big dose of disappointment today, as Yahoo shares dipped to $23.50, losing 10% of their value.

It’s just as ouch as that old pick-up line: “Did it hurt when you fell from heaven?”

Yahoo, of course, has fallen from a little lower in the stratosphere.

But the abandonment of a $33-per-share deal that Microsoft might have meant is gone, baby, gone and the prospect of a lot of negative attention over a questionable partnership with Google adds up to a lot more turmoil ahead.

Of course, turmoil has been the weather forecast for Yahoo for far too long now.

And there is possibly more to come. Many, many sources told BoomTown to expect more major departures from Yahoo’s ranks, including from its board.

According to people familiar with the situation, not every board member was thrilled with Yahoo’s Google alternative.

But not every board member, like a lot of Yahoo employees, has a lot of control over the troubled Internet company.

The blogosphere immediately jumped all over the inevitable meme that after the Yahoo (YHOO) deal fell apart, Microsoft (MSFT) CEO Steve Ballmer’s job was at risk.

What with the problems with the new Vista operating system and the general feeling that Microsoft’s Internet strategy is in shambles, the argument that Ballmer would be shown the door by an impatient board and replaced by former CEO and Founder Bill Gates was clear.

Actually, not so such much at all, but that has not stopped all the noise.

Maybe Ballmer should go and maybe not, but I would like some proof that’s not in evidence as yet.

Instead, this TechCrunch story was typical, full of assertions as easy to make with certainty, but just as easy to knock down.

First, it noted that Ballmer being the “big driver behind this deal at Microsoft–some would say to the point of obsession” had made him vulnerable to the board, which he was trying to impress with a “transformative” deal and that he was worried about being fired.

Actually, I would be worried if Ballmer was not obsessed, given that more than $40 billion is an awfully big bet.

And has anyone noticed how typically ineffectual most boards are (see Yahoo, see Time Warner [TWX], see them all)?

I doubt there is a major force on the board of threat to Ballmer, except Bill Gates, who has never shown the slightest inkling of turning on his longtime partner.

Also, Gates himself fumbled with regards to the Web, and he even wrote a book about not doing that in 1995, called “The Road Ahead.”

Microsoft has bungled the Internet? It’s out of touch when it comes to the Web? Its troops have too many lifers who cannot innovate? Google (GOOG) has cleaned their clock? What!?

Of course, this has been news to exactly no one for about a decade now.

In any case, the Yahoo purchase was not the worst of ideas, if a bit obvious–although I have written several times that Microsoft should have bought up other Web 2.0 companies instead of Yahoo.

Both sides acted cloddishly, to be sure, and I am sure Microsoft’s board and execs are smarting a bit from misjudging this foray–I myself wonder how they did they not anticipate just how recalcitrant Yahoo would be.

But Microsoft’s withdrawal was clearly a better path than a hostile proxy fight.

So it did not work out (as yet)? So what? And if Microsoft stock rises tomorrow on the news, of course, all will be forgiven.

In addition, TechCrunch uses a source that is not exactly reliable, quoting “one secondhand account that leaked to us yesterday before the deal was called off,” who tells tales of Ballmer’s ranting and raving about how he wouldn’t let the board “crucify” him.

Ballmer can sometimes be a loudmouthed popinjay!? What ho?!?

Also news to exactly three people in the tech sector and they have been in an isolation tank since 1976.

More to the point, I got that exact anonymous email too, and it was credible and from someone with some good information.

But I felt I could not use the Ballmer info without more proof (also, I would need to know who this person is or find other non-anonymous-to-me people to bear its assertions out).

While compelling and sent in very good faith by an obviously smart person, as many of these types of emails are, I figured the lively emailer was probably from someone close to or even one of the many disgruntled employees of Microsoft who did not like the Yahoo deal.

There were lots of them, as BoomTown reported here, but I determined the emails were just wishful thinking.

But you be the judge!

Here’s two sections from the emails I got in their entirety related to Ballmer (with some minor edits to protect the sender) that TechCrunch clearly used verbatim, so you can see the whole thing rather than the pulled quotes:

Ballmer really does think his job is on the line if he doesn’t close the Yahoo deal, and soon. He’s worried after the fiasco that was the Windows Vista launch, then this, the Board will ask Gates to stay on while they find someone to replace him. Apparently this has caused Ballmer to be more of a tyrant than ususal, yelling and screaming at employees for almost no reason. Some Microsofties are secretly wishing the deal falls through so that Ballmer will get the axe and Microsoft will get new leadership.”

and

The particular incident… was that an exec made a comment about not having to worry about Ballmer anymore if this Yahoo deal falls through. He didn’t realize Ballmer was within earshot. Ballmer started yelling and screaming that this deal would go through and that the board wouldn’t be able to ‘crucify’ him over this. The scuttlebutt suggests that the board was ready to walk because they fear this deal is proving to be to big of a distraction, but Ballmer is obsessed with making it happen in order to protect his job. The board gave him one more week to get it done….many in Microsoft belive Gates will stay on if asked because even Gates realizes that Ballmer needs to go.”

Like I said: Wishful thinking.

This, of course, does not absolve Ballmer from having to come up with some very smart moves and fast to at least keep competitive with archrival Google and also figure out a way to protect its Windows software franchise in the wake of Google’s cloud computing effort.

But that is a longer and more vicious ground war that will go one for a long time.

Yahoo might be Ballmer’s Vietnam or Iraq, as still other bloggers are writing, but let’s keep in mind that the first went on for decades and the second, unfortunately, is still slogging on.

Let’s move this back-and-forth- wrangling aspect of the story forward and get to the real issues in the Yahoo-Microsoft takeover battle, shall we?

So why is Yahoo’s board holding out for a higher price than Microsoft wants to offer to raise it?

From numerous reports, Microsoft (MSFT) seems willing to go to $33 a share, up from its original $31, while Yahoo (YHOO) and its shareholders are looking for from $35 to $37.

Are they simply looking for a bigger payday? Do they believe it is worth more, in spite of recent mismanagement? Do they want to save face, given the Internet company once had a $41 offer from the software giant? Is this just a big game of digital chicken?

Yes. Yes. Yes. And definitely.

But, according to sources close to Yahoo, one of the more important reasons Yahoo wants a higher price has a lot to do with worries about the domination of the email and communications market if a merger with Microsoft took place and the threat of regulatory action that would force the companies to divest those assets.

Sources said that Yahoo wants a large cushion in case the government finds the combination of Yahoo Mail and Hotmail too much.

It is.

That’s because Microsoft and Yahoo completely dominate all mail on the Internet. According to the most recent comScore (SCOR) figures, for example, Yahoo has 256 million users, while Microsoft has 255 million.

Google’s (GOOG) Gmail is a distant third with about 92 million users and AOL (TWX)–which kind of started off the whole email craze among consumers–has about half that at 49 million.

The same is true in the instant messaging market, with Microsoft and Yahoo holding an 80% to 90% market share together.

Calling David Boies! It all smells like antitrust investigation to me!

A high-ranking Yahoo source agrees. “We need a lot of reason to do the deal, because it could be very bumpy once we agree,” said the source. “How damaged would Yahoo be if it did not go through, or if important pieces of Yahoo had to be separated from the company?”

Some close to the company, though, would prefer a spinoff of its powerful communications products and services, in the case of a Yahoo-Microsoft union. “We could be the Google of communications,” said one source.

Of course, Google does not want this to happen. In a recent CNBC interview, Google CEO Eric Schmidt signaled the search giant’s intentions related to this thorny communications domination with a loaded quote:

“If they go ahead and the merger’s ultimately successful, it would be possible for Microsoft to integrate some of the properties and essentially eliminate consumer choice, particularly in electronic mail, instant messaging, the things where they have 80% or 90% market share, and that’s a sweet spot for Microsoft in its ability to eliminate choice.”

And, in fact, Yahoo CEO Jerry Yang and Chairman Roy Bostock raised the issue in a letter on April 7 to Microsoft, rejecting Microsoft CEO Steve Ballmer’s letter threatening to go hostile if talks did not proceed.

The Yahoo leaders wrote:

“As to antitrust, we have discussed with you our concerns. Any transaction between us would result in a thorough regulatory review in multiple jurisdictions. As a follow-up to a recent meeting among our respective legal advisers we had on this topic, and at your request, we provided to you on March 28 a list of additional information we would need to further our understanding of the regulatory issues associated with any transaction. To date, you have still not provided any of the requested information.”

According to one source, the antitrust concern that was not named was related entirely to email and instant messaging.

“Bring together our content and search is not an issue,” said the source. “But mail is a real problem.”

Please see this disclosure related to me and Google.

How glad BoomTown was to finally see Jerry Yang up close and personal, after our valiant but futile efforts to get near the Yahoo co-founder and CEO in 2007.

No, we’re not stalking him in a restraining-order kind of way, although I did stake a claim to a front-row seat in the intimate theater at the Las Vegas Hilton for his keynote this morning at the Consumer Electronics Show, where Yang couldn’t help but see me.

Like he cared!

Not at all, as he was riveted to delivering his shtick about Yahoo’s mobile efforts (it’s a 3.0 version, according to Yang, which is a good move since Web 2.0–in general and in particular–has not been so kind to the Internet giant), as well as giving the audience a glimpse of some interesting new concepts related to its popular email program.

The front rows were so packed with top Yahoo execs–including President Sue Decker, as well as David Filo, Jeff Weiner, Brad Garlinghouse, Ash Patel, Dave Karnstedt, Bradley Horowitz, Hilary Schneider and even Chairman and former Yahoo CEO Terry Semel–that you had to wonder who was running the show back in Sunnyvale, Calif.

(I mean, say, if Google had decided to launch a sneak attack today with their bicycle brigade, it could have taken over Yahoo without a shot fired!)

Yang maintained a low-key tone throughout the presentation, as is his way (I kept imagining the performance being done by Microsoft’s Steve Ballmer, who would have sold it all hard until he popped a vein).

Nonetheless, Yang did get the message through that opening its platform up to third-party developers would be a big push in 2008 for Yahoo.

So, the widgets in the excellent mobile product, called Yahoo! Go 3.0, are laudable and much more innovative than anything out there, even though Yahoo has been too quiet about marketing its Yahoo! Go product until now.

But at CES, Yang brought Yahoo Connected Life Executive Vice President Marco Boerries (pictured here) out to show off the mobile apps, including one from MTV (Viacom head Philippe Dauman and MTV Networks head Judith McGrath were in the audience) that seemed fun.

More interesting was Yang’s presenting new concepts for its Yahoo Mail product, which will be more social, relevant and integrated. A lot of this functionality is already being used by the open-source email company Zimbra, which Yahoo recently acquired (and whose head Satish Dharmaraj I interviewed last week).

As I wrote in that piece, I love the innovations, including ranking of those you email with most frequently and instant mapping from email, as well as a plethora of great features for email.

So, one vexing part of Yang’s presentation was that this concept needs to become a reality tomorrow. He brought out Co-Founder and interim CTO Filo to basically promise “soon,” but I say: Make it snappy!

I know, we’re pushy when it comes to Yahoo, but it’s because we care!

Well, care is not the right word exactly, but we are certain that a powerful and pioneering company like Yahoo can out-innovate these Web 2.0 newbies who get ridiculous funding to make goofy widgets and have the nerve to call it a business.

Thus, we took the chance and his prone position after the speech surrounded by well-wishers to go up and say hello in person to Yang, whom BoomTown has known for longer than either of us would care to say.

And, miracle of miracles, Yang said it had been far too long since we had gotten together and agreed to meet in 2008, a meeting for which we have been asking and egregiously posting about forever, to no avail.

How much does BoomTown love CES? Not so much.

But if it gets me lunch with Yang, I love it. So, Jerry, it’s officially 2008 and I am waiting by the phone for your call.

Here is my video of parts of Yang’s keynote:

When BoomTown broke the news that Yahoo was paying $350 million for open-source email and calendaring company Zimbra back in September, it was clear it was not a middling move on the part of the Internet giant, which too often can act like a mouse when it comes to acquisitions.

In fact, the innovative Zimbra and employees, like its lively CEO and founder Satish Dharmaraj, are just the kind of new blood Yahoo needs as it tries to reinvigorate itself.

With the purchase, which was a bit pricey (but well worth it), Yahoo finally got the weapons it needed to go head-to-head with Google in the battle to offer fast-forward kinds of Web-based mail services to a wider range of customers from big ISPs to small businesses to universities.

Let’s be clear, Yahoo Mail has remained the bigger provider of Web email to general consumers. But most agree that it allowed Google’s Gmail to suck up all the oxygen in the room with more flashy features like threading of conversations, while not serving up a strong response in an arena Yahoo has pioneered quickly enough.

While its latest version of Yahoo Mail got strong reviews, such as this one from Walt Mossberg, Zimbra vaunts its effort at differentiation from the hyped Google offering forward more quickly.

More importantly, it has really strengthened Yahoo’s ability to make online email act more like a computer program than a Web page, which has been the main focus of late of Yahoo, Google and Microsoft’s Windows Live Hotmail.

The Zimbra acquisition takes it up a notch with a plethora of potential new features, such as easier-to-use calendaring and all sorts of nifty features via a widgety “Zimlet” system.

In addition, since Zimbra is designed with flexible and open Ajax programming tools, it makes it easy for third-party developers to make many other applications that jack innovation from the outside, making the communications platform the center of the Web experience with video, search and other tools.

Making online email sexy was not the greatest thing to have to sell to investors, but Zimbra did get backing from high-profile VCs like Benchmark Partners, Redpoint Ventures and Accel Partners. The start-up’s clients include Comcast, many ISPs and a number of colleges. The Wall Street Journal’s Robert A. Guth wrote about the company last year.

Now that the acquisition by Yahoo has taken place, Zimbra will continue to operate somewhat independently, although moving operations to Yahoo this month under the communications unit headed by Yahoo Senior Vice President Brad “Peanut Butter Manifesto” Garlinghouse.

Here’s my video interview with Zimbra’s Dharmaraj, which took place yesterday at its soon to be abandoned HQ in San Mateo:

And here is my video interview with Garlinghouse back when news of the acquisition broke:

This week Om Malik and his co-host, Joyce Kim, interview Satish Dharmaraj of Zimbra, on the online GigaOM Show on Revision3.

It’s a nice get in the wake of the $350 million sale of the email start-up to Yahoo, a story we broke last week in this column here.

They also chat with VC Jeff Clavier, who has a new seed-stage fund.

Here also is the video interview I did with Brad Garlinghouse of Yahoo, who led the acquisition of Zimbra, the morning the deal was announced:

Another day, another scoop we try to serve up honestly on BoomTown!

Yesterday, we broke the first news of the acquisition of Zimbra by Yahoo, after we had the first scoop last week of Yahoo’s purchase of BuzzTracker.

Those Yahoo dealmakers are certainly busy these days and we will continue to watch them oh-so-carefully.

Until then, here’s more info on Zimbrafest:

First, the $350 million deal between Yahoo and the open-source email and calendaring provider has been a long time coming, much earlier than just the summer time frame Yahoo’s Brad Garlinghouse has said in a number of interviews I have read on the Web.

While the Yahoo senior vice president also has said he was blown away by the company when it first came onto the scene several years ago, according to sources close to the deal team at Yahoo, Zimbra has been in its sights since well before former CEO Terry Semel left the company. Apparently, Yahoo’s always careful (some say glacial) decision-making caused the slower pace.

Nonetheless, the high price (well above the valuation of Zimbra in its last round of funding) was certainly a bold move for Yahoo, especially coming after the $300 million deal to buy behavorial ad network BlueLithium earlier this month.

Both deals are signs that Yahoo understands it has to double down in areas it dominates clearly, like in display advertising and, of course, mail. Yahoo’s consumer mail product is a powerful one and its recent iteration has gotten a lot of kudos (like those from Walt Mossberg here).

The deal takes Yahoo’s offerings up a notch in the innovation arena, where Zimbra has been doing a lot of cool user interface and other stuff, such as its nifty “Zimlet” widgets.

In addition, it also drops Yahoo right into the commercial space, where Google has been plowing, given Zimbra’s own inroads in the university, business and ISP markets.

I am sure there will be a lot to complain about going forward (the will-Yahoo-ruin-the-sassy-little-Zimbra seems to be the refrain in some posts on the Web). But let’s just say for now that this hefty buy might make a nice fit at Yahoo.

To explain why, here’s a lovely video we shot of Garlinghouse talking about the deal, while in the atrium of San Francisco’s Palace Hotel at the TechCrunch40 conference. He discusses the deal, as well as what he thinks is over- and under-hyped.

And because we hate to see him grimace when we do, we did not mention his (in)famous “Peanut Butter Manifesto” in the video, even though we were totally thinking about it. (Sorry, Brad!):

Yahoo is set to make yet another acquisition–this time of white-label open-source email provider Zimbra. Sources close to the deal said that the Internet portal will pay $350 million, considerably upward of its most recent valuation, for the email and calendar provider.

Backed by Benchmark Partners, Redpoint Ventures and Accel Partners, San Mateo, Calif.-based Zimbra’s clients include Comcast, many ISPs and a number of colleges. The Wall Street Journal’s Robert A. Guth wrote about the company last year.

In a post by Om Malik on his GigaOm blog, he noted: “The Zimbra-built email client marries the email and calendaring applications with visual voicemail, and eventually will tie into other Comcast triple-play services.”

Yahoo’s been on a bit of an acquistion roll of late, grabbing behavioral ad network BlueLithium for $300 million earlier this month and news aggregator BuzzTracker last week for $5 million.

Yahoo CEO Jerry Yang continues on his 100-day march–and now seems to be making a number of interesting moves.

The acquisition was within Yahoo Senior Vice President Brad “Peanut Butter Manifesto” Garlinghouse’s unit.

Yahoo is briefing reporters today on the deal, but left BoomTown off the list. Big mistake, as it just makes us cranky and bored!