Google to acquire Postini for $625 million

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Online giant Google Inc. has signed a definitive agreement to acquire communications security and compliance firm Postini for $625 million in cash.

Under the terms of the agreement, which is subject to working capital and other adjustments, Postini will become a wholly owned subsidiary of Google. The agreement is subject to customary closing conditions and is expected to close by the end of the third quarter 2007. The acquisition represents Google's focus on its hosted Web applications for businesses.

"I think that the acquisition really does reaffirm our commitment to delivering a hosted application to businesses," said Dave Girouard, vice president and general manager at Google Enterprise. "We've seen a big amount of interest from large businesses, which is part of what is driving the acquisition of Postini. Google has always been focused on the end-user experience, and in bigger business security and compliance is a must."

The Postini services, which include Email Security, IM Security, Web Security, Message Archiving, Message Encryption and Policy-enforced TLS, will now be available on Google Apps, which is compromised of Gmail, Calendar, Talk, Docs & Spreadsheets, and Personal Start Page.

Google will gain access to Postini's 35,000 clients and Postini to Google's 100,000 clients. There is very little crossover between the two audiences, according to Mr. Girouard. Even though cross-platform integration will be offered, clients can contract each firm individually. Google will continue to support Postini customers and invest in Postini products.

Postini will keep its name and offices in San Carlos, CA ûclose to Google's headquarters in Mountain View, CA.

"Both companies share the same vision of building highly scalable Web-based applications," said Quentin Gallivan, president/CEO of Postini. "This merger will create the next generation in on-demand services."

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