Taking further aim at one of Microsoft’s core franchises, Google said Monday that it would acquire the e-mail security and management company Postini for $625 million in cash.
Google goes corporate
The deal underscores Google’s ambitions to become a serious player in the business of selling software to companies and organizations, in competition with Microsoft and others. Google, which earns the vast majority of its profits from selling ads it places next to search results and on sites across the Web, has increasingly emphasized its small but rapidly growing software business. This year, Google’s chief executive, Eric E. Schmidt, said the company’s strategy had three components: “search, ads and apps,” or applications, meaning software.
As part of that strategy, Google has been trying to persuade businesses to replace existing e-mail systems and other programs with the company’s own package of business software. That package, called Google Apps, includes the Gmail service, an online calendar and programs that can read and edit documents created with the Word and Excel programs from Microsoft.
The acquisition of Postini — a private company whose products allow businesses to control spam and viruses and help them to monitor and preserve e-mail messages to comply with regulations — is an effort by Google to allay some of those concerns.
Web e-mail services like Gmail will not be a significant force in the corporate market until 2010, when they are likely to become the first choice of 8 percent of corporate users, according to a Gartner forecast in January.
“Google has a long ways to go before they become a strong competitor to Microsoft” in business software, said Chenxi Wang, a principal analyst with
Forrester search.
Google plans to continue offering Postini’s services, which customers pay for, to users of other e-mail systems, Mr. Girouard said. But he added that Google intended to make it easy for Postini’s customers to “test drive” Google Apps. Mr. Girouard also said Google had not decided which of those services would be integrated into the free and paid versions of Google Apps.
Google plans to continue offering Postini’s services, which customers pay for, to users of other e-mail systems, Mr. Girouard said. But he added that Google intended to make it easy for Postini’s customers to “test drive” Google Apps. Mr. Girouard also said Google had not decided which of those services would be integrated into the free and paid versions of Google Apps.
Shares of Google rose $3.16 Monday, to $542.56. Early in the day, the stock reached a record of $548.74.
