A Whale of a Deal

An Israeli company, Whale Communications, which has been a Microsoft Partner since 2002, has been — or will be, subject to regulatory approval — ‘acquired’ by Microsoft. Whale will maintain all current operations until the close of the transaction, Microsoft said in a ZDNet article.

According to the Globes [online] (Israel business news) article entitled “Microsoft buys Israeli co Whale for $75 million – The company’s investors include venture capital firm exSeed, investment bank Goldman Sachs, and BRM Capital,” Bill Gates has acquired Israeli security software company Whale Communications for $75 million. This was not confirmed or denied in the ZDNet article where Microsoft declined to comment.

The Globes article states,

The company provides secure Virtual Personal Network (VPN) services using SSL encryption. It has turned its focus to the communications market, and is offering enterprises solutions for secure access to knowledge systems and enterprise applications. Whale was one of the first companies to focus on this field back in 1992.

The article also notes this is not the first acquisition of an Israeli company by Microsoft:

Microsoft’s previous acquisitions in Israel include Maximal Innovative Intelligence, which it acquired in 2001 for $20 million, and Peach Networks, which it acquired in 2000 for $72 million. Peach was merged with the Microsoft TV division, which closed in 2002. Peach was managed by Moshe Lichtman, who previously managed Microsoft’s IPTV division, and recently returned to Israel to head up the company’s expanding local R&D center.

Microsoft has also hinted that it would be making an intensive entry to the information security field and the acquisition of company with an R&D capacity like that of Whale secure Internet access may well become Microsoft’s first R&D center in a new strategic field, remote from the company’s areas of business.

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