Yahoo has just paid US$ 350 million for email service firm Zimbra, reports the Associated Press.

Zimbra offers email hosting and related services to universities and businesses. The move has some speculating on what Yahoo's next move could be in a sector Microsoft happens to know well.

Of late, email services are enjoying keen interest by online brand names. Google got the ball rolling with its acquisition of Postini. Recently Microsoft began working with Datran for email marketing; and Juice, perhaps sensing a trend, tapped ExactTarget.
The Zimbra purchase could simply be a way for Yahoo to upgrade its existing email service, something it did in 2004 when it bought Oddpost. Yahoo Mail has shed users recently; expanded offerings could be a way of luring some back.