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Google Acquires VirusTotal

by Zacks Equity Research

September 11, 2012 | Comments : 0 Recommended this article: (0)

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Google Inc. ( GOOG - Analyst Report ) recently announced that it has acquired an anti-malware start-up company VirusTotal to beef up protection for its Internet services. The terms of the deal were not disclosed.

Spain-based VirusTotal is a free anti-virus online service that analyzes files and URLs for viruses and other malicious content through different antivirus engines and website scanners. The company had already been using Google services such as App Engine and Google Storage even before its acquisition.

VirusTotal will continue to operate independently and maintain partnerships with other anti-virus companies and security experts.

Google is a market leader in online advertising and it has been exploring various ways to increase its advertising revenue and fight competition. Though it is not clear as to how Google will integrate VirusTotal’s technology into its own products, the acquisition will enable Google to extend its security resources to nearly all of its services, like social network Google+ and Gmail, where files and links are constantly exchanged.

The Internet search engine major is on an acquisition spree. Last month, Google acquired marketing start-up Wildfire that provides software to help businesses to place ads on social-media sites, strengthening its foothold in the world of social media. In May, the company closed its acquisition of cell phone maker Motorola Mobility Holdings, Inc. ( ) for $12.5 billion ($40 a share). In 2011, Google bought at least 26 companies.

Google has done very well in the second quarter, with its gross revenue touching a record $12.21 billion. Revenues from both Google-owned and partner sites continued to grow in double digits on a year-over-year basis. Historically, Google has always fared better than Yahoo Inc ( YHOO - Analyst Report ) , which has been struggling, and Microsoft, which is yet to gain critical mass.

However, other legal entanglements related to competitive matters or patent infringements remain an overhang. Google retains a Zacks #3 Rank, which translates into a short-term Hold rating.

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