I just got off the conference call on Google's $625 million cash acquisition of security firm Postini, which executives said is expected to close in the third quarter.
Basically, the move will enable Google to flesh out its Google Apps hosted applications, which include e-mail, calendar, instant messaging, Docs & Spreadsheets and Web page creation, with the security and government regulation compliance services that businesses need.
There wasn't much detail revealed on how the companies will integrate their products, but Google execs made it clear that Postini will continue to offer its services to other e-mail and IM providers besides Google.
"This does reaffirm our commitment to delivering hosted services," said Dave Girouard, vice president and general manager of Google Enterprise. That hosted services market is the one in which Google execs swear they are not targeting Microsoft, but which observers say is a definite threat to the dominance of Windows. Google, which expanded its tagline to "search, ads and apps" earlier this year, is offering free versions of applications that Microsoft now charges for use on the desktop. Google knows that security is necessary for businesses to trust hosted services.
Not only will the purchase accelerate the adoption of hosted apps, Girouard says, but the two companies complement each other technically and culturally. Quentin Gallivan, Postini president and chief executive, says Postini agreed to the acquisition instead of going public because the companies are "a perfect fit."
The standard version of Google Apps is ad-supported and free. A Premier version, launched in February, costs $50 per user per year and offers 10GB of storage, instead of 2GB, and makes ads "optional."
This is Google's second security-related acquisition in recent months. In May,, which creates a protected environment on computers, known as a "sandbox," where a person's surfing activity is directed.