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July 9, 2007

Google Acquires Postini for $625 million

Duncan Riley

40 comments »

Google has announced the acquisition of communications security and compliance company Postini for $625million.

Postini offers a number of on-demand communications security and compliance solutions and serves more than 35,000 businesses and 10 million users worldwide. Postini’s services include message security, archiving, encryption, and policy enforcement tools which can be used to protect a company’s email, instant messaging, and other web-based communications platforms. Notably Google was already utilizing Postini technology with Gmail; the acquisition would appear to be a case of Google wanting to own a technology it was already using under license.

The acquisition of Postini comes as a surprise following rumors in June that the company was working towards an IPO.

Dave Girouard, Vice President & General Manager, Google Enterprise wrote on the Google Blog of the need for Google to deliver products that support complex business rules, information security mandates, and an array of legal and corporate compliance issues.

We realized that we needed a more complete way to address these information security and compliance issues in order to better support the enterprise community. That’s why we’re excited to share the news that we’ve agreed to acquire Postini, a company that offers security and corporate compliance solutions for email, IM, and other web-based communications. Like Google Apps, Postini’s services are entirely hosted, eliminating the need to install any hardware or software. A leader in its field, Postini serves more than 35,000 businesses and 10 million users, and was one of our first partners for Google Apps. Their email and IM management services include inbound and outbound policy management, spam and virus protection, content filtering, message archiving, encryption, and more. We will continue to support Postini’s customers and we look forward to the possibilities ahead.

The acquisition is expected to be finalized by the end of the third quarter 2007.

  • Sphere It

This entry was posted on Monday, July 9th, 2007 at 6:32 am and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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Comments

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  1. Kewtr

    July 9th, 2007 at 6:36 am

    I love Pastini’s food, but $625mln? Wow.

    Does Google usually let places like Postini that they buy continue operating and supporting their existing customers, or do they phase that stuff out? It seems like for $625mln they’d need to keep up what they’re doing to make it worthwhile.

  2. Ric.List

    July 9th, 2007 at 6:39 am

    I think the price is a bit higher. But that’s google’s style. Maybe yahoo will acqyure MessageLabs, Brightmail……?

  3. Sam

    July 9th, 2007 at 6:45 am

    I think the price is too high.

  4. Vijay Teach Me

    July 9th, 2007 at 6:57 am

    What do you do with a load of cash box, go and buy and again go and buy, and then some more….

    Security yeah why not…..

    Vijay

  5. Tim

    July 9th, 2007 at 6:59 am

    I love hearing about big payouts like this. Keeps me motivated, and keeps the VC’s handing out money. =^)

  6. Shawn

    July 9th, 2007 at 7:44 am

    Me too! Does anyone know how big of a company Postini was in the office? How many people worked there?

  7. Rob Mathieson

    July 9th, 2007 at 7:44 am

    Does anyone know what googles total spending has been on acquisitions? Its must be truly huge.

  8. HOORAY FOR STOCKMARKET

    July 9th, 2007 at 7:45 am

    YEEPEE!!!! Stockmarket Apocalypse is coming near.

    Government & Corporate Greed just set higher milk prices & oil prices…. I hope stockmarket plumming Oil and pork & belly stock. Greed & crooks wanted to make unhealthly babies, increase pollution, and increase health care cost.

    Wealthiest people will have harder time get higher salary. LOL!!! They have college degree. Hehehe.

  9. Tyler

    July 9th, 2007 at 7:46 am

    Anyone know what multiple of run-rate revs that is?

  10. FansOfTech

    July 9th, 2007 at 7:47 am

    @Kewter: Didn’t Symantec already purchase Brightmail?

    Anyways, I think the price is a bit high for Postini but I think owning this software will be worth it in the end. There’s no doubt that Google has some big plans up their sleeve and the acquisition will probably wind up saving them plenty of time, effort and cost given the rise in popularity of Gmail AND Google Apps.

  11. Shambhu

    July 9th, 2007 at 7:49 am

    They have an impressive list of customers. Wonder if they run Google Apps or MS Office.

  12. Do no evil Policy

    July 9th, 2007 at 7:53 am

    Can Google help us reduce milk price?

  13. VM

    July 9th, 2007 at 8:11 am

    Watchout Microsoft exchange and IBM Lotus.. Google getting ready to enter the enterprise mkt with this new acquisition…

  14. Jay (living in First Life)

    July 9th, 2007 at 8:18 am

    Google is being smart here. This is a power play to make Google for Corporations dominate the market.

    Look at it this way:

    A) Postini customers - 10 MM customers added to Gmail, Google Docs, Google Calendar, Google Analytics (and thereby also potential new AdWords customers)

    B) Pre-existing and future Google for Corporations users - a real reason to use Gmail (and thereby Google Docs, Calendar, Analytics, AdWords, etc.) because now I know my email/IM will be secure and compliance for email archiving will be met.

    It’s amazing to see how few of the folks on here get the logic. I agree that the price might seem high but think of this from a supply and demand standpoint: there is a lot of money around and not that many quality start-ups (despite what you may believe by reading TechCrunch). When the supply of money is high and the number of quality assets it’s chasing is low, the valuation for those start-ups will be high.

  15. Creating Startup

    July 9th, 2007 at 8:18 am

    Once you create a child… You own it. You name the baby. You create new web 2.0 product.

    Now, companies will buy your baby and kidnap your power… :/
    It’s up to you to sell it or not.

    Facebook did good job - they never sell to yahoo.

  16. Andrew

    July 9th, 2007 at 8:33 am

    @15…the only reason they haven’t sold out, is because the founder wants an astronomical figure. Trust me the second he gets his number he’ll sell facebook with a smile on his face

  17. Concrete Stain

    July 9th, 2007 at 9:21 am

    Google literally has so much money -

    - whatever they paid / could be almost without thought - RB

  18. Robert Dewey

    July 9th, 2007 at 9:45 am

    Google already made a return on Postini; shares are up by $4.

  19. Leah

    July 9th, 2007 at 9:53 am

    One of Postini’s customers is Jenny Craig… which is good for a security company… imagine if that information leaked to the public.

  20. Hornswaggled

    July 9th, 2007 at 10:19 am

    These moves show me Google is serious about improving and giving to the users. I think this is just the beginning of the Google vs Telecom and I am all for it.

    What the heck to you see Yahoo doing? They are just falling farther and farther behind. I have been paying for Yahoo mail for a few years now and may drop them now. I see more of the same from both G and Y.

  21. Andrew

    July 9th, 2007 at 10:36 am

    why are you paying for yahoo mail? Their free accounts now have unlimited storage space

  22. sputnick

    July 9th, 2007 at 10:37 am

    Shares or cash?

  23. Mitch

    July 9th, 2007 at 11:18 am

    Just curious but what do the 10 million engineers who already work at Google do? What have they developed internally lately (other than perhaps checkout)?

  24. Nick

    July 9th, 2007 at 11:21 am

    A blog entry over at the BackChanne breaks down just how many customers Postini had in the enterprise market, the only surprise for me was that Microsoft chose to take-out Frontbridge and not Postini. Whats next? Yahoo buys Messagelabs for 300M? Half the market share of Postini.

    For those of you with click fatigue, the market rankings look like this:

    Postini 49%
    Messagelabs 22%
    Frontbridge 21%
    MXlogic 5%
    Blackspider 0.4%

    Nick

  25. Tien Nguyen

    July 9th, 2007 at 11:53 am

    How many security companies does Google need? Myspace/eBay need to get cracking on some of them.

  26. andrew

    July 9th, 2007 at 12:49 pm

    I agree with VM… “Watchout Microsoft exchange and IBM Lotus.” I know a networking shop and they make a lot of money hosting exchange servers and they have banned gmail traffic on their network. They are feeling threatened.

  27. Dmackdaddy

    July 9th, 2007 at 3:31 pm

    The price is right when you consider they do what Iron Port does and its all SW no HW and Cisco bought them for $525MM

  28. John McKinley

    July 9th, 2007 at 5:12 pm

    An interesting play by Google, at a pretty rich pricetag, so certainly not an internally focused technology acquisition. Thoughts on the move at http://www.greatfallsventures.com.

  29. Lp

    July 12th, 2007 at 8:38 pm

    When will gmail no longer be “Beta?” I think I first heard about gmail in ‘05. I have used it for well over a year now. It just makes me wonder what will, in the minds of Google, qualify a coming out party for gmail.

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