Symantec buys MessageLabs

Symantec Corp. will acquire MessageLabs Ltd., a provider of online anti-spam software, for about $695 million, the Wall Street Journal reports.

Symantec intends to use MessageLabs' technology to develop other online security products, said Greg Hughes, Symantec's chief strategy officer.

The security companies are flush with cash. Symantec, of Cupertino, Calif., said it held $2 billion as of July 4, while McAfee Inc., of Santa Clara, Calif., reported cash holdings of $1.3 billion as of June 30.

Businesses worldwide will spend about $30 billion in security software, hardware and consulting services in 2008, up 19 percent from 2007, according to Gartner Inc.

While not immune to budget pressure, spending on security tends to hold up better than other technology. "Security budgets aren't considered discretionary," said Gartner analyst John Pescatore. "Businesses don't want to get hit by a new threat or be noncompliant" with regulations.

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