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British telecom giant buys security firm Counterpane

October 26, 2006|From the Associated Press

BT Group, the former British telecommunications monopoly, said Wednesday that it bought Mountain View, Calif.-based Counterpane Internet Security Inc. to boost its computer security services for corporate customers.

Financial terms were not disclosed.

The acquisition is the latest example of industry giants looking to beef up their security offerings.

Data storage provider EMC Corp. completed two deals with information security companies this year, buying RSA Security and Network Intelligence for a total of $2.3 billion. IBM Corp. is set to soon close a $1.3-billion acquisition of network monitoring company Internet Security Systems Inc.

Counterpane monitors 550 computer networks worldwide for multinational and Fortune 100 customers to help them guard against hackers and other security threats. The privately held company, launched in 1999, had assets of $6.8 million at the beginning of last year, BT said.

One of Counterpane's founders was Bruce Schneier, a cryptologist who in recent years has become a security guru and critic of national security practices.

Under the buyout, Schneier will continue in his role as Counterpane's chief technology officer and Paul Stich will remain chief executive.

"A large public company gives us instant credibility, and they've got access to customers, giving us enormous opportunities to sell Counterpane," Schneier said.

BT said Counterpane would help expand its security management services, particularly in the U.S.

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