Yahoo is about to acquire Xoopit, a startup that brings social tools into email programs like Yahoo Mail and Gmail, for $20 million, according to multiple press reports.
The Wall Street Journal and BoomTown (both owned by Dow Jones, incidentally) have reported on the deal -- the WSJ says talks are in their final stages, but BoomTown says the deal is done. I've emailed Yahoo, Xoopit, and Xoopit investor Accel Partners; Yahoo and Accel say they're not commenting, and Xoopit hasn't responded at all.
From a product perspective, the acquisition would certainly make sense for Yahoo, as it's been trying to transform its properties into a social network of sorts, which third-party applications can connect to. Last year, it announced that Xoopit was one of the initial partners in the Yahoo Open Strategy program, where Yahoo Mail users could use Xoopit to find photos that had been sent to them.
Presumably an acquisition would allow Yahoo to fully integrate other Xoopit features, such as the ability to update and view Facebook status messages from your email. In turn, that could make Yahoo Mail (which remains the most popular webmail service -- see the comScore data below) more useful and give the company more data about its users, which might improve Yahoo's plummeting ad revenue. What the deal would mean for Xoopit fans who use Gmail is less clear.
Xoopit raised a total of $6.5 million from Foundation Capital and Accel. A $20 million acquisition isn't exactly a huge payoff for investors, but given the broader financial environment, it's not bad, either.
