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Why Google will Acquire Postini

Google announced that it has agreed to purchase Postini for $625 million in cash. Why?

Postini is best known for its managed (“hosted,” “on-demand”) spam filtering service, but that’s not what attracted Google. Gmail and its Google Apps cousin already have sound spam filtering technology — they don’t need help from Postini.

What Google needed was a way to round out its Google Apps story with solutions for its customers’ policy, compliance, and archiving/e-discovery needs. Google was already partnering with Postini to provide this for Google Apps customers. Presumably the experience was a positive one and Google simply wanted to own the technology and people.

Google’s statements hint that the lack of Google-owned technology in these areas has been a sales inhibitor:

Many businesses have been forced to choose between innovation on one hand, and these backoffice mandates on the other. In effect, many businesses use legacy systems not because they are the best for their users, but because they are able to support complex business rules. We agreed to acquire Postini in order to create a more complete Google Apps solution that addresses the information security and compliance issues facing businesses of all sizes.

Richi Jennings

One Comment

  1. Posted July 9, 2007 at 9:12 AM | Permalink

    I wonder how MessageLabs and MXLogic are feeling now? Who will buy them?

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