San Francisco-based Xobni, the email startup co-founded by ex-Expedia employee Adam Smith, has pulled in $7 million in venture financing from Cisco Systems, Khosla Ventures, First Round Capital, Baseline Ventures and Atomico.

Maker of an Outlook plug-in which helps people organize email, Xobni was dubbed the "next generation of social networking" by Bill Gates in a keynote talk last February. So the question is: Why is Cisco leading the round rather than Microsoft?

According to TechCrunch, Microsoft made an unsuccessful run at Xobni last year for about $20 million, a deal that collapsed because -- as Erick Schonfeld reported -- Xobni's leadership grew increasingly uncomfortable "about its eventual fate inside the Microsoft machine."

Meanwhile, GigaOm reports today that Cisco's investment in Xobni is part of a "continuing tussle against Microsoft over the concept of collaboration."

Xobni's service -- which competes with the Paul Allen-backed startup Gist -- has been downloaded more than 1.5 million times and is now being used by Fortune 500 companies.

It doesn't appear as if there is any bad blood between Xobni and Microsoft, since Xobni co-founder Matt Brezina told Inman today that they have been working closely with Microsoft developers and product managers. The company also is a member of Microsoft's Accelerator program.

"They've been good to us," Brezina tells Inman.