Google to acquire online security firm Postini

Google to acquire online security firm Postini
NEW YORK: Google Inc. has agreed to buy Postini Inc., a closely-held security firm, for $625 million in cash. The acquisition helps the search firm to enhance its online applications offerings as Postini offers e-mail security solutions.

Postini's security and encryption services provide protection to instant messaging, e-mail and other communications. The services are provided to some 35,000 businesses and 10 million individual users. The company, based on San Carlos, California, has data centers from where the services are offered to the customers.

The deal will enable Google to attract more customers to its Gmail service and analysts say the company will now take on Microsoft Corp in a more effective manner. Gmail, with online calendars, spreadsheets and instant messaging facility, and with the added security provided by Postini's solutions, will be a better proposition than Microsoft's products, they aver.

Google is also making business software applications available online through Google Apps, offering a tough competition to Microsoft' Office suite of products. Google Apps has a large clientele comprising small businesses.

The acquisition is expected to close by September. It will be Google's second biggest deal in 2007 after it agreed to buy DoubleClick Inc. for $3.1 billion. August Capital, Bessemer Venture Partners, Mobius Venture Capital, Pacifica Fund, Summit Partners and Sun Microsystems Inc are some of the investors in Postini. It was founded by Scott Pettry.

Google said the firm, with its 300 staff, will become a wholly-owned subsidiary.

Postini's products act as filters to weed out unsolicited e-mails. They monitor some two billion messages a day, nearly half of them spam. The company also offers antivirus and encryption services, in direct competition with leaders McAfee and Symantec.