Secure Computing buys content-filter company

Secure Computing on Tuesday announced it has agreed to acquire Seattle-based N2H2, a maker of Web-based content-filtering products Bess and Sentian, which can be integrated with Cisco Systems firewalls and the Cisco Content Engine.

In a stock-swap transaction valued at approximately $20 million and subject to customary regulatory approval, the acquisition will give Secure Computing — which makes the SmartFilter content-filtering line in addition to its firewall and authentication products — a larger share of the Web filtering software market, estimated at $270 million in 2002 by research firm IDC.

IDC estimates competitors Websense and SurfControl led the market last year, each with about 20 percent market share, followed by Secure Computing, Symantec, and N2H2. Nine other vendors held negligible share.

“This is a market-share play,” acknowledged Tim Steinkopf, chief financial officer at Secure Computing. Many of N2H2’s 70 employees are expected to join Secure Computing, although Steinkopf pointed out there are likely to be some layoffs due to job redundancies.

Secure Computing intends to support the N2H2 Web content-filtering products through the full life of the one-, two-, or three-year subscriptions that N2H2’s 2,000 or so customers have contracted for, said Steinkopf.

At the same time, Secure Computing will seek to combine the best of the Secure Computing and N2H2 Web-filtering product lines. Steinkopf noted that the majority of N2H2’s customer base hails from the education market, whereas Secure Computing’s customers are primarily from enterprises that include Florida Power & Light and government agencies, such as the U.S. Army, Air Force, and the Georgia public-library system. These differing customer segments help make N2H2 an attractive acquisition for Secure Computing, Steinkopf said.