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MS anti-spam play still a threat

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Never afraid to dip into its monster cash pile when an opportunity presents itself, Symantec is going to buy Brightmail, one of the leading anti-spam vendors, for $370m in cash. The deal will improve Brightmail's position, although the prospect of Microsoft entering the anti-spam market is still a significant threat.

The deal has long been expected, despite the fact that Brightmail filed its IPO documents just a few weeks ago. The companies have had a close relationship since July 2000. Symantec owns 11 per cent of Brightmail already, and has a seat on the board. In the year ending 31 January, 2004, Brightmail made about 20 per cent of its $26m revenue from an anti-virus add-on it offered using Symantec's software.

Enrique Salem, Brightmail's CEO, said the deal presents synergies without excessive crossover. "Symantec has the market-leading anti-spam software for consumers, and we have the market-leading product at the gateway," he said.

He also said that Brightmail's OEM partners, which include IronPort Systems and Borderware Technologies, are safe following the deal.

Andrew Lochart, VP of product marketing at BMS rival Postini, was surprisingly positive about the news. "It eliminates one of the leading independent private companies from the market, which means the other companies, like Postini, all move up a notch," he said.

Mr Lochart also said the firm has rarely seen Symantec in competitive situations in the past. It also gives Postini, which has its sights set on an IPO too, a benchmark by which it could judge its own value.

Brightmail is probably a lot safer inside Symantec, which continues to grow and generate cash rapidly on the back of its consumer antivirus business, than it would have been alone, but both firms see Microsoft as a looming threat.

Microsoft is Brightmail's biggest customer, bringing in more than 10 per cent of its revenue, but is expected to build its own anti-spam software. It is also expected, at some point, to offer its own flavor of antivirus software, competing with Symantec.

Source: ComputerWire/Datamonitor

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Symantec acquires Brightmail for $390m
Symantec fights auto-responder menace
MS takes fight to the spammers

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