Google to Buy Security Firm Postini for $625M

Google's third largest acquisition will bring much-needed security to Google Apps and bolster its hosted position vis-a-vis Microsoft.

Google announced July 9 that it has agreed to buy software security firm Postini for $625 million in cash.

Postini, which provides message security, archiving, encryption and policy enforcement services for hosted software, will become a division of Google Apps. Google Apps consists of Gmail, Google Docs, Google Talk, Calendar and several other hosted applications.

The purchase of Postini, which boasts 35,000 businesses and 10 million users worldwide, is meant to assuage concerns that Google Apps is not secure enough for enterprise-level businesses, and thus position Google better against desktop software solutions.

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"Large businesses have been reluctant to move to hosted applications due to issues of security and corporate compliance," said Dave Girouard, vice president and general manager for Google Enterprise. "By adding Postini products to Googles technology ... employees get the intuitive products they want, and the company achieves the security and assurance it needs."

Google will continue to support Postini customers and invest in Postini products.

Googles acquisition of Postini is expected to close by the third quarter and is the companys third largest disclosed purchase, behind YouTube (October 2006, $1.65 billion) and the planned DoubleClick buy (April 2007, $3.1 billion).

The Postini announcement also comes close on the heels of Googles purchase of GrandCentral, a service that provides users with one number for all their phones, and FeedBurner, an RSS feed aggregator.

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