Security-software makers may not yet see Google ( GOOG) as a rival. But the search giant's $625 million decision to
acquire Postini, a privately held company that offers email filtering and compliance services, is firing straight onto security's main turf. Google's latest acquisition is being seen as a move by the company to bolster confidence of businesses in Google Apps, which brings Gmail, calendar, docs and spreadsheets, and a Web page creator into a single suite. Postini is not the first security company that Google has bought. Two months earlier, it acquired GreenBorder, whose software helps create secure Web browsing. And Google's toolbar already warns users about Internet malware and has extensions to detect phishing, fake Web sites that try to steal user information. Google is also partnering with Stopbadware.org, an organization that indexes Web sites as those containing potential infections. Google's growing security ambitions is, primarily, a frontal attack on Microsoft's ( MSFT) stranglehold on the personal computer. At the same time, Google is trying to better control the user's Internet experience, so it can predict more accurately what a user needs in an effort to better customize advertising. Potentially in the way of this war of titans could be traditional security companies like Websense ( WBSN) and McAfee ( MFE), which have spent millions on acquisitions to build products similar to what Google is focusing on now.
Websense and McAfee may not see Google as a security rival today, but in a few years they could find an increasing number of their users opting for Google's products, say analysts. Google's forays are making desktop-based applications, including antivirus products, increasingly less relevant as the search giant creates a new Internet-centric system, says Christofer Hoff, chief security strategist with privately held security firm Crossbeam Systems. "Traditional security companies do anti-spam, anti-virus, firewall, and anti-spyware, all of which consumers and small businesses will realize can be increasingly bypassed if they use Google's free, but secure, products," says Hoff. Soon, larger businesses could demand greater security features for lowered costs, raising the pressure on traditional security players, he says. For companies like McAfee and Websense, the heat is already on. The StopBadware.org relationship, for instance, has helped Google display a link next to its search results warning users of potentially harmful Web sites. That's exactly what McAfee spent about $75 million on last year. McAfee acquired start-up SiteAdvisor and made a free toolbar available to users that indicates how secure a Web site is even before clicking on the site. McAfee says SiteAdvisor is only a small part of its business and that it already partners with Postini. "We are a natural partner for Google as we don't compete with them; we didn't before the Postini acquisition and don't now," says a McAfee spokesperson.
As for Postini, its email security service is a small part of the overall security market, which also includes gateway appliances, desktop security software, server protection, and network protection, McAfee points out. For Websense, however, a bigger challenge looms. Websense
acquired SurfControl for about $400 million in a bid to attract more small businesses as customers and add email filtering capability to its portfolio. "Websense dominates the web-filtering market, which is growing at an unimpressive rate," says Daniel Greenberg, chief marketing officer for Tumbleweed ( TMWD). "They were looking at messaging security as a hot market and one reason they acquired SurfControl was for its email filtering products." Websense now faces a formidable rival in the Google-Postini combination. Websense declined to comment. While not exactly yet in Google's cross hairs, it won't be long before other companies like Symantec ( GOOG) find themselves being outmaneuvered in the security business by Google. The Google security juggernaut will only get stronger from here, says Hoff. "Google's toolbar and apps will get more intelligent," he says. "And to that end, Google will continue to make investments in anti-phishing, IM security for Google Talk, and voice-over-IP security to bolster its recent purchase of Grand Central." Earlier this month, Google bought GrandCentral, a start-up that offers users the ability to have a single phone number and all calls routed to that number.