Yahoo Buys Oddpost

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Yahoo has acquired Oddpost, a San Francisco startup that provides an innovative, Web-based e-mail service, and plans to use its technology to spruce up Yahoo Mail and other Yahoo services, the companies have confirmed.

Like other Web-based e-mail, Oddpost uses a standard Web browser, but its interface functions more like that of a desktop program such as Microsoft Outlook. For example, users can organize or delete messages by dragging them into folders instead of having to reload a Web page each time. Oddpost says this makes it quicker to use. Its users pay $30 yearly for the service, which can also be used to aggregate content from news sites and Web logs.

Merging Technology

A Yahoo spokesperson confirmed the acquisition Friday, but would say little about Yahoo's plans.

"All I can say is that they have outstanding technical expertise that will be brought to bear on products across the Yahoo network, such as Yahoo Mail," says Joanna Stevens, a Yahoo spokesperson.

A Web posting from Oddpost to its subscribers on Friday was more revealing. Oddpost will be working on "a new, advanced Yahoo Mail product" that incorporates Oddpost's technology, the posting said, adding that a date for the new product has not yet been set.

Oddpost was founded about three years ago and has ten employees, all of whom now work for Yahoo, says Toni Schneider, Oddpost CEO. The acquisition was completed Friday and financial terms are not being disclosed, he adds.

The Oddpost service works using Dynamic HTML, XML, and Simple Object Access Protocol (SOAP). It does not use Java and requires no downloads or plug-ins. It currently works only with Microsoft's Internet Explorer browser, although Oddpost had been developing a version for Mozilla, Schneider says.

Oddpost stopped accepting new subscribers last week. Current users can keep using the service and will be switched to the new Yahoo Mail service when it's completed, Oddpost says in its posting. Schneider won't say how many subscribers Oddpost has. The company also licenses its technology to enterprise software vendors including Oracle, which uses it in the Oracle Collaboration Suite, he says.

Yahoo's acquisition comes at a time of heated competition in the Web-based e-mail market. Google spiced things up earlier this year by announcing its Gmail service, which is currently being tested and offers 1GB of storage. Yahoo responded in June by revamping its user interface and upping its own storage limit to 100MB for its free service. Its purchase of Oddpost seems likely to spark another round of innovation.

Oddpost's Progress

Oddpost's history, recounted on its Web site, reads like a Silicon Valley fairy tale. In late 2000, founders Ethan Diamond and Iain Lamb bought a pair of cheap laptops, signed up for a wireless Internet service, and "started coding away in San Francisco's public libraries, cafes, and late-night eateries." They eventually moved to an office, a former hardware store in San Francisco's Chinatown district.

"Our goal was to build a better e-mail product, and as we started building a business, we were able to grow and we brought in some investors," Schneider said by phone Friday. "The goal was to keep growing until somebody came along that made a lot of sense, and that's what happened with Yahoo."

Oddpost unveiled its service early in 2003 at the Demo conference. The application was well received and it won a PC World Class award that year.

Oddpost's posting to its users about the acquisition is in the form of an FAQ. It reads in part:

"So what you're saying is that Oddpost is disappearing into the bowels of corporate America?"

"On the contrary: our technology will flourish like a palm tree and/or IT professional's waistline in Silicon Valley. While the glory of Oddpost has, thus far, been witnessed by the eyes of an enlightened few, soon it will be savored by millions. We couldn't be more excited."

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