Symantec’s acquisition of Brightmail in May is being viewed by analysts as a canny move by the security software giant. But anti-spam software market leader Brightmail commanded a premium price. Symantec paid $370 million – 14 times Brightmail’s annual revenues of around $26 million in 2003 and well above what Brightmail could have expected to bank from the initial public offering it had already registered for.

The two companies already had close ties: Brightmail’s CEO is a former Symantec executive and the company currently bundles some Symantec antivirus software with its products. Moreover, Symantec had built an 11% stake in the company and taken a seat on its board.

But the real plus for Symantec will come from the grafting on of Brightmail’s customer base. With 48% of its business derived from consumer products, Symantec is pushing hard to grow the proportion of its business that comes from enterprise customers. Brightmail software is used by 10% of the Fortune 500 and is considered to be the market leader in corporate anti-spam.

In product terms, Brightmail brings its Reputation Service, which blocks identified spammers, and Anti-Fraud, which protects against fraudulent ‘phishing’ emails. But Gartner analysts suggest that the grafting on of such tools to Symantec’s antivirus product bundles could result in Brightmail losing its ‘best of breed’ status, making the deal rather better for Symantec’s revenues than for Brightmail’s customers.

Spam continues to be a major headache for businesses, so it is surprising that Symantec and other major security firms had not made email filtering acquisitions sooner.

But others are beginning to follow suit. Identity management vendor Entrust last month acquired AmikaNow!‘s email content scanning and analysis technology. Terms were not disclosed but it is believed the deal is worth over $1 million, just above AmikaNow!’s total annual revenues. The six-year-old start-up’s scanning technology is distinctive for going beyond the usual word identification, using contextual analysis and artificial intelligence. Entrust intends to absorb the technology into its own Secure Messaging and Secure Data offerings by the end of 2004, as well as offering it as a stand-alone but Entrust-branded product.

Meanwhile, security and infrastructure services heavyweight Verisign continued to push into the wireless market with the acquisition of Jamba!, a German mobile billing and content provider, for $273 million in cash and stock – nearly double Jamba!’s expected revenues of $140 million. Wireless security is an obvious growth area for Verisign, and with Jamba!’s library of graphics, games and ringtones Verisign is now staking its claim in the wireless content market.