Google has signed "a definitive agreement" to acquire Postini, which specializes in on-demand communications security and compliance solutions, serving more than 35,000 businesses and 10 million users worldwide. Postini's services -- which include message security, archiving, encryption, and policy enforcement -- can be used to protect a company's email, instant messaging, and other web-based communications.

Under the terms of the agreement, Google will acquire Postini for $625 million in cash, subject to working capital and other adjustments, and Postini will become a wholly-owned subsidiary of Google. The agreement is subject to customary closing conditions and is expected to close by the end of the third quarter 2007.

"With this transaction, we're reinforcing our commitment to delivering compelling hosted applications to businesses of all sizes. With the addition of Postini, our apps are not just simple and appealing to users -- they can also streamline the complex information security mandates within these organizations," said Eric Schmidt, Chairman of the Board and Chief Executive Officer of Google.

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Hosted services, like Google Apps and Postini solutions, provide organizations with high quality communications tools without the expense and hassle of traditional on-premise solutions. Google Apps, which includes Gmail, Calendar, Talk, Docs & Spreadsheets, and Personal Start Page, has been adopted by more than 100,000 businesses already, according to Google. Postini solutions include Email Security, IM Security, Web Security, Message Archiving, Message Encryption, and Policy-enforced TLS.