February 12, 2008 / 1:08 PM / in 11 years

Dell to buy e-mail services company MessageOne

NEW YORK (Reuters) - Dell Inc said on Tuesday it will buy business e-mail services provider MessageOne Inc, which was co-founded by Michael Dell’s brother, aiming to compete with similar service provided by Microsoft Corp and Google Inc.

A screenshot of MessageOne.com, taken on February 12, 2008. Dell Inc said on Tuesday it will buy business e-mail services provider MessageOne Inc, which was co-founded by Michael Dell's brother, aiming to compete with similar service provided by Microsoft Corp and Google Inc. REUTERS/www.messageone.com

The $155 million cash deal is the computer maker’s latest in a recent wave of acquisitions ranging from small shops like software company Everdream to Dell’s $1.4 billion purchase in November of network storage provider EqualLogic.

MessageOne’s software, which is delivered to customers over the Internet, helps companies manage and archive e-mail, minimize outages and prevent data losses, Dell said in a statement.

“It simplifies (information technology) for our customers,” said Steve Schuckenbrock, Dell chief information officer. “It will compete up against ... solutions that are emerging in the market from companies like Google, like Microsoft and others.”

Google last year paid $625 million to acquire e-mail security firm Postini to beef up its online “Google Apps” service to make it more useful inside businesses.

Dell said MessageOne is owned in part by two investment funds: Impact Venture Partners and Impact Entrepreneurs Fund. Dell founder and Chief Executive Michael Dell and his family are investors in the funds, which are managed by his brother, Adam Dell.

Dell said it expects Michael Dell, his wife Susan and their children’s trust to receive about $12 million from the deal. Adam Dell will get about $970,000 and his parents will receive about $450,000.

Michael Dell intends to donate their proceeds from the deal to charity, the company said, adding that the CEO was excluded from negotiating the terms and decisions of the acquisition.

Dell, the world’s second-largest maker of personal computers, has stepped up the pace of acquisitions since Michael Dell retook the helm a year ago amid slowing sales growth and tough competition from Hewlett-Packard Co.

Dell last month completed the purchase of EqualLogic, its largest acquisition since the company was founded in 1984. EqualLogic specializes in data storage technology, Dell’s fastest-growing business.

Shares of Round Rock, Texas-based Dell were up 17 cents to $20.10 in morning trading on the Nasdaq.

Reporting by Franklin Paul and Tiffany Wu, editing by Mark Porter/Dave Zimmerman

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