Yahoo to Buy eGroups

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Yahoo said yesterday it will purchase eGroups, a communications services provider for 800,000 e-mail groups with more than 17 million members.


Yahoo Inc., Santa Clara, CA, is expected to pay eGroups Inc., San Francisco, approximately $428 million, or just over 3.4 million shares of Yahoo common stock, in exchange for all of eGroups' outstanding shares, options and warrants.


The eGroups service enables members to create, join and manage e-mail groups focused on personal and business interests. Complementing the core service is a set of integrated Web-based group communication features such as group calendars, file sharing, polling and e-mail archives.


Yahoo, the Web's largest portal, has been looking for ways to expand the communication tools available to its users and plans to integrate eGroups' services into its own. Yahoo currently offers three main communications services -- Yahoo Clubs, Yahoo Mail and Yahoo Messenger -- and claims to deliver more than 3.6 billion messages per month.


The deal is subject to regulatory approval and is expected to close this year during the third quarter, according to both companies.
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