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Critical Path locks up security deal

Critical Path buys Xeti in an effort to boost the company's security features in its Internet messaging services.

Critical Path today said it has acquired Xeti in an effort to boost the company's security features in its Internet messaging services.

With the acquisition of Los Altos, Calif.-based Xeti, Critical Path said in a statement that it will improve security features within service offerings it delivers, such as Web hosting, email and other Internet-based services. Critical Path runs its own data centers and provides outsourced services to corporations, Web hosting providers, Web portals and other companies. The company provides email services for such firms as US West, Sprint and E*Trade.

The acquisition could help the company avoid future security troubles. In September, Critical Path said that a security hole was found in its email systems, which allowed access to a user's account without requiring a password.

Yesterday, the company said it had been hit with a mail delivery slowdown affecting 1.2 million of the 6.7 million mailboxes the company services.

Founded two years ago, Xeti is a developer of public key infrastructure (PKI) software that issues, renews, revokes and otherwise manages digital certificates, which are essentially electronic IDs that vouch for the identity of an individual or company.

Financial terms of the deal were not disclosed.

Critical Path, based in San Francisco, said Xeti's PKI software provides message content and file attachment encryption. The software will allow the company to ensure the confidentiality of emails and electronic documents, the company said.