Google to buy Web security company for $625 mln

(Adds exec quote, details)

NEW YORK, July 9 (Reuters) - Google Inc. (GOOG.O: Quote, Profile, Research, Stock Buzz) said on Monday it has agreed to buy Web-based security provider Postini for $625 million, expanding its package of online applications to compete with Microsoft Corp.'s (MSFT.O: Quote, Profile, Research, Stock Buzz) Office.

Postini provides security and encryption services, protecting instant messaging, e-mail and other communications, to more than 35,000 businesses and 10 million users worldwide. Google said the deal would enable it provide organizations with more Web-based services similar to its Google Apps package, which includes its e-mail service Gmail, Calendar, and Talk, its messaging service.

Google has been expanding its range of services from Web search and advertising to include popular software applications for businesses, such as word processing, putting it in direct competition with Microsoft's Office package of applications.

Google said its Google Apps has been adopted by more than 100,000 businesses to date.

"With this transaction, we're reinforcing our commitment to delivering compelling hosted applications to businesses of all sizes," said Google Chief Executive Eric Schmidt in a statement.

Google said Postini will become a wholly owned subsidiary. The deal is expected to close by the end of the third quarter.

((Reporting by Yinka Adegoke, editing by Dave Zimmerman; e-mail:yinka.adegoke@reuters.com Reuters Messaging: Yinka.adegoke.reuters.com@reuters.net; +1 646 223 6081)) Keywords: GOOGLE POSTINI/

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