Postini, a San Carlos, Calif.-based vendor that sells email and messaging security and compliance tools has 35,000 customers. Its services include message security, archiving, encryption, and policy enforcement 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 and Postini will become a wholly-owned subsidiary of Google, according to a press release the companies issued Monday morning. The deal 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, Google's chairman of the board and chief executive officer, in a statement.

Postni's security tools are sold to companies in a hosted model. The vendor's Perimeter Manager service offers email content filtering, and spam blocking features. The software quarantines or tags suspicious email before it reaches a company's perimeter.

The search giant claims its popular line of applications, including Gmail, Calendar, Talk, Docs & Spreadsheets and Personal Start Page, has been adopted by more than 100,000 businesses to date. But Dave Girouard, vice president and general manager of Google Enterprise, admits security concerns have prevented some companies from embracing Google tools.

"By adding Postini products to Google's technology, businesses no longer have to choose -- employees get the intuitive products they want, and the company achieves the security and assurance it needs," Girouard said in a statement.