Google buying Web security firm

NEW YORK (CNNMoney.com) -- Internet bellwether Google agreed to purchase Postini, a privately held provider of Web communications security, for $625 million in cash, the company announced Monday.

The statement from Google (Charts, Fortune 500) said the purchase will allow it to expand its Google Apps hosted application business, which includes Gmail, Calendar, Talk, Docs & Spreadsheets.

"The response to Google Apps has been tremendous, with more than 1,000 small businesses signing up for the service every day," said the statement from Google. "At the same time, large businesses have been reluctant to move to hosted applications due to issues of security and corporate compliance."

Google has used its cash reserves to make a number of purchases recently. Last week it announced a deal to buy GrandCentral Communications, a privately held startup that lets users manage their existing phones and voice mailboxes over the Web as if they were a single account.

Its highest profile purchase to date is the $1.65 billion acquisition of Web video sharing service YouTube, which was announced in October, although that deal was dwarfed in size by its $3.1 billion purchase of privately held DoubleClick, a top digital marketing services firm, that was announced in April.