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TheStreet Open House

Symantec to Buy IM Software Firm

Moving to capitalize on the soaring popularity of instant messaging, Symantec (SYMC - Get Report) on Tuesday announced its attention to purchase privately held IMlogic.

Neither the price nor the annual revenue of the smaller company was disclosed, but analysts at market researcher IDC estimate that IMlogic posted sales of about $8 million in 2004, and was sold for $20 million to $30 million.

IMlogic makes software to secure instant messaging, a popular, but still relatively unsecure technology that first took hold in the youth market but is now widely used in many businesses.

"From shipping companies to hedge funds, businesses in almost every market segment are adopting real-time technologies like IM at a record pace to improve their information sharing abilities and to decrease the time needed to make business decisions. Consumers have already embraced it as a communications tool and are sending more than 12 billion messages daily, with many users sending more IMs than emails," Symantec said in a press release.

IDC analyst Chris Christiansen said the acquisition seems like a logical one that should bolster Symantec in a key area. "We've felt for sometime that IM is next big wave. If you claim to offer a total messaging solution, you have to have a solution for IM," he says.

Symantec is still struggling to integrate the much larger acquisition of Veritas, but making this takeover work should be much easier, Christiansen says.

The company said the acquisition will close shortly after winning regulatory approval, but did not give a time frame.

Shares of Symantec were flat in after-hours trading; the stock closed with a loss of a penny to $17.49.

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