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Acquisition pushes Software.com to record close

Software.com shares rocketed up 32 11/16, or 29 percent, to an all-time high of 146 13/16 Thursday after the developer of mobile communications software said it would buy privately held mobile.com Inc. in a $400 million stock deal.

Bellevue, Wash.-based mobile.com is a wireless Internet application service provider that offers Instant Messaging technology and other wireless Internet expertise.

Software.com (Nasdaq: SWCM) officials said the mobile.com acquisition will enable it to offer mobile service providers a broader array of applications to create and deliver mobile Internet services.

"We plan to integrate mobile.com's suite of applications rapidly into Software.com's offerings which we will then deliver as mobile Internet infrastructure software to service providers worldwide," said CEO John MacFarlane in a prepared release.

With the acquisition, Software.com plans to deliver wireless unified messaging, enabling mobile service providers to tap the exploding wireless services market. Based on this technology, wireless service providers can provide their customers with ``access anywhere'' - the ability to access voicemails, emails, pages and faxes from a single mailbox regardless of location, time or device.

Terms of the merger call for mobile.com's existing 70 employees to join Software.com immediately following the close of the deal, which is expected in about six weeks. Mobile.com CEO Michael Buhrmann will join Software.com's executive management team as general manager of its wireless business.

The acquisition is expected to be accounted for as a pooling of interests and has been approved by the board of directors of each company.

In its latest quarter, Software.com posted a loss of $364,000, or 1 cent a share, on sales of $15.5 million.

First Call consensus expects it to lose 6 cents a share in its first quarter and 17 cents a share in the fiscal year.

Its shares fell to a low 17 5/8 in August.

All five analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.

Reuters contributed to this report.