Google charged into the internet security market yesterday by acquiring Postini, the privately owned antispam specialist, for $625 million (£310 million) in cash.

The deal underscores Google’s designs on the corporate sector and its decision to target Microsoft’s Office business. It represents about a third of revenues – $4.8 billion in the latest quarter – for the world’s largest software group.

Founded in 1999, Postini made its name developing software that filters the global torrent of unsolicited e-mails. It monitors about two billion messages a day for 11 million end-users. Up to half of those communications are likely to be spam, according to industry estimates.

The group has branched into antivirus and encryption services, competing with the cyber-security leaders McAfee and Symantec. It counts seven of the world’s top thirty banks among its 35,000 client companies.

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Postini’s technology will be used to augment Google Apps, the paid-for web-based tools that were launched this year and compete with Office stalwarts such as Word and Excel.

The California-based group was founded by Scott Pettry and initially was backed by August Capital, which invested $6 million in the company at the height of the dot-com boom.

Postini, whose investors also include Bessemer Venture Partners and Sun Microsystems, had been earmarked to float on the stock market this year. Instead, Mr Pettry, who sources say remains a “key stakeholder” and is the company’s chief technical officer, will join the growing list of multimillionaires created by Google’s acquisitive streak and cash-pile.

All Potsini’s applications are provided as services over the web, a model that mirrors Google’s own. Microsoft’s business is largely built on licence fees for software.

Google Apps has been signing up more than 1,000 small businesses a day and has been adopted by more than 100,000 businesses. It is still dwarved by Microsoft Office, which has about 240 million users, and Google executives say their system faces resistance from larger companies concerned over security.

Dave Girouard, the head of Google’s Enterprise division, said: “Large businesses have been reluctant to move . . . By adding Postini products to Google’s technology . . . [a business] achieves the security and assurance it needs.”

Postini, with a staff of about 300, will become a wholly owned subsidiary of the search giant, which is understood to be snapping up small companies at the rate of one or two a week. Recent Google acquisitions include Green Border, another security player. The company, which Google bought in May for an undisclosed sum, offers protection against viruses, spyware and trojans.

The Postini deal also maintains the pace of consolidation in the fast-growing secure archive and litigation software sectors. Last week Autonomy, the British search technology specialist, bought Zantaz, a rival digital archive group, for $375 million. Like Zantaz, Postini has products that make relevant information quickly available in the “discovery process” that takes place when a group is faced with a lawsuit.

The market for these tools has been boosted by a series of corporate scandals and new American regulations, which mean that companies now have 99 days to produce documents and other records of communications.

Forrester Research, the analyst, estimates that the “e-discovery” market will be worth $5 billion by 2011.

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