Some commentators believe that this transaction signals a developing trend of large internet companies buying out smaller ones as the value of dot.coms falls.
Yahoo! plans to incorporate eGroups, which has 17 million members and over 800,000 active e-mail groups, into its existing internet applications which include Yahoo!Mail, Yahoo!Messenger and Yahoo!Clubs.
Goeff Ralston, general manager of Yahoo!’s communications group, believes that “E-mail groups is an application which is really core to the way people communicate on the internet”. In a statement, Yahoo! said, “The acquisition combines the web's largest on-line community with a leading provider of e-mail group communications. The combination of these two companies supports Yahoo!'s goal to be the only place anyone has to go to find and get connected to anything or anyone”.