Fenerbahce appear to be closing in on a move for Manchester United's winger Nani.
Watford have confirmed the signing of Greece international defender Jose Holebas.
The former Chelsea forward was appointed as manager of the npower Championship side on a two-year deal following the sacking of Sean Dyche.
The move was made by Watford's new owners, the Pozzo family, who recently completed their takeover of the club from Laurence Bassini.
The Italians also own Serie A side Udinese and La Liga outfit Granada, but Zola insists Watford will not become a feeder club for the latter.
In fact, he instead predicts a bright future for the Vicarage Road side.
"I wouldn't say the Udinese experiment has been a failure so far," Zola said.
"You can say so many things but, at the end of the day, when you see what Udinese have achieved in the last few years it is quite amazing.
"It is a small club, it has been in the Champions League for a while and they keep producing players and remain competitive.
"That is the policy of the club but I have been assured and I can assure that they want to take Watford to a different level.
"That is why I am here, to be honest. I like what we are trying to do here and I believe that it is going to go that way."
The move to appoint Zola in place of Dyche has disappointed some fans.
The former defender played for the club for several years and helped the club to a respectable 11th place finish in his only season at the helm.
"Of course I have to [mend some bridges]," the former West Ham manager said.
"I know that the person who was here before me has done very well and to him goes my respect and my admiration.
"He has done a very good job so for me the task will be difficult, but it has always been like that for me. It has always been a challenge since I started playing football.
"I was half of the size of the others and they said I wouldn't stand a chance to become a footballer.
"I took that challenge and now I have another difficult challenge.
"I told the players I will give everything I have got inside to make them a little bit better and then we will see how the results (go).
"It is interesting. It is a challenge and I take it."
Zola will be revealing his new-look backroom team in the coming days and is currently assessing the playing squad.
One player he definitely wants to keep is Watford's reigning player of the year, Adrian Mariappa.
The defender's agent had talks with the club yesterday and has been attracting admiring glances from the Premier League, with Reading expressing an interest.
"Adrian I know is a very good player and was one of the best last year," Zola said.
"Obviously we want to keep him but we understand it is not only our decision, also it's Adrian's.
"I understand he maybe has the possibility to go to the Premier League and I won't step in front of him and stop him if he wants to go."