Internet search engine Google announced on Monday that it has acquired Postini Inc., a San Carlos, California-based e-mail security and management company, for $625 million in cash, intensifying its battle with rival Microsoft to offer better services to corporate customers.

Google said it has entered a definitive agreement with Postini to acquire the latter company which is a global leader in on-demand communications security and compliance solutions.

The deal, which Internet powerhouse believes would push it further into the business software market, is expected to close by September, Google said. However, the deal is still subject to customary closing conditions.

Postini, best known for filtering spam from company inboxes, will become a wholly owned Google subsidiary after the acquisition.

Founded by Scott Petry in 1999, Postini, whose state-of-the-art technologies protect and manage e-mail, instant messaging and other Web-based communications, serves more than 35,000 businesses and 10 million users worldwide.

The competition between the most successful and influential software company, Microsoft and Google, the leader in Web search and a provider of software applications run over the Internet has intensified for the last few months. Both the companies are making efforts to enter each others’ territories.

Whereas, the search mammoth has created an online software suit, intended to beat Microsoft’s office suit, Redmond based software company has launched its search engine, Live Search, which is crafted to compete with offerings from rival online powerhouses Google.

Google’s recent acquisition depicts Google's strong desire for success in the business of selling software to companies and organizations. The search engine giant has already started selling companies a low-cost suite of online software that includes e-mail, calendaring and word processing.

Google’s online suite of software, dubbed Google Apps, includes Gmail service, an online calendar, and programs that can read and edit documents created with Microsoft Word and Excel. Google will soon add a new product for presentation to its Apps suit. This Presentation software would allow users to create presentations, much like Microsoft's ubiquitous PowerPoint software.

"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," Eric Schmidt, Chairman of the Board and Chief Executive Officer of Google, said in a press release.

Even after the acquisition, Google will support Postini customers and invest in Postini products, Google said.

Microsoft, the worldwide leader in software, services and solutions, has been facing challenges from Google and other companies which are offering free or low-cost software applications that can be hosted online and need not to be installed on the hard drives of individual computers.

Mountain View-based Google Inc.’s ease to use, simplicity of design and massive database listings have made it the Numero Uno search engine in the world. The Web search leader is now extending its design magnificence in new directions by making the search services more comprehensive.

Larry Page and Sergey Brin have to be credited for co-finding this giant internet search and advertisement engine, Google, which has helped the masses to be in touch with every sphere of life as it is said, 'Everything is now just a click away and within the reach of everybody.'