http://www.forbes.com/2007/07/09/google-postini-email-tech-cx_ag_0709postini...
Forbes
E-Mail Security
Google Buys E-Mail Security Firm Postini
Andy Greenberg, 07.09.07, 2:02 PM ET
In a bid to ramp up its Web applications for businesses, Google announced
Tuesday that it would be acquiring the messaging security company Postini
for $625 million. Privately held Postini, based in San Carlos, Calif.,
serves more than 35,000 companies by encrypting e-mail and instant
messaging data and filtering spam.
General Manager of Google Enterprise Dave Girouard said in a statement that
the acquisition is designed to make Google's online services more secure
and more suited to enterprise applications. More than 1,000 small
businesses have begun registering for Google's services every day, but the
security concerns of larger enterprises have prevented them from using the
online offerings.
"By adding Postini products to Google's technology, businesses no longer
have to choose," he said. "Employees get the intuitive products they want,
and the company achieves the security and assurance it needs."
Added security is one more step in Google's push into Microsoft's
enterprise software market. Since officially launching its Google Apps
Premier Edition in February, Google has been competing directly with
Microsoft's desktop dominance, offering enterprise level applications
online, such as e-mail, spreadsheet creation and word processing for $50
per user per year.
Another deal last month with Salesforce.com, a leading vendor of Web-based
customer relations management software, also demonstrates that Google is
solidifying its software-as-a-service products for business.
Google is still playing catch-up in online software security, says Joe
Fisher, vice president of product management at the messaging security
company Tumbleweed Communications. He points to Microsoft's acquisition of
Frontbridge, another messaging security company, nearly two years ago,
which added security measures to Microsoft's services like Hotmail.
But Fisher says that the deal will also offer Google a new set of
monetizable customers among Postini's current clients, more than 11 million
individual customers. "Microsoft has sold software very effectively to
enterprise for a long time. Google hasn't," Fisher says. "Postini already
has a great name in the industry and a broad customer base. So part of what
Google gets with Postini is a new level of distribution."
The acquisition, which is expected to close in the third quarter, marks
Google's third largest buyout. Google paid $3.1 billion for online
advertising firm DoubleClick in April, and $1.65 billion in cash for
YouTube last October.
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R. A. Hettinga