Yahoo Closes Acquisition of eGroups

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Yahoo Inc., Santa Clara, CA, last week closed its acquisition of eGroups, a San Francisco-based host site for e-mail groups. The deal, first announced in June, seeks to provide Yahoo with a new communications vehicle for its users and the opportunity to pitch eGroups' 17 million members on additional Yahoo services.


In a statement announcing the deal's finalization, Yahoo said it would take a one-time, $25 million charge against third-quarter earnings for expenses related to the acquisition. Yahoo is exchanging about 3.4 million shares of its stock, or approximately $428 million, for all outstanding eGroups shares and options.


"We have successfully completed the acquisition of eGroups and are moving quickly to merge the company's popular e-mail group communications service into Yahoo's existing global communications platform," Jeff Mallett, Yahoo's president and chief operating officer, said in a prepared statement.


With this acquisition, Yahoo said it plans to integrate these group e-mail services throughout the Yahoo communications network, a vast collection of properties that include Yahoo Clubs, Yahoo Mail and Yahoo Messenger. The company claims to deliver more than 4 billion messages per month. Yahoo wants to enable its users to send and receive messages and alerts to desktop computers, pagers, personal digital assistants and cell phones.


Approximately 65 employees of eGroups are expected to join Yahoo and relocate to Yahoo's Santa Clara headquarters and various regional offices.
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