British Telecom Buys CounterPane

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British Telecom came to the rescue and bought out Counterpane for what is believed to be about 40 Million bucks. The bad news is that Counterpane had venture capitalists sinking almost 80 million into the company. I guess they will get back fifty cents on their dollars. From Counterpane’s website here:

Counterpane Internet Security, Inc. has received a total of $78 million in funding from venture capital and corporate investors.

Counterpane has been one of the least appealing Managed Security Services companies over the past 5 years (despite improvements to their services), and they have enviously stood on the sidelines while other companies have been bought up by the bigger corporations.

It looks like BT will be keeping Counterpane’s executives too, including leftist activist and cryptologist Bruce Schneier. Schneier has been on record advocating against using internet logs to track known terrorists. Which is very ironic since his own company uses the same techinques to catch hackers against his own customers.

From Reuters here:

Britain’s BT Group Plc said on Wednesday it had bought Counterpane Internet Security Inc., boosting its capability to advise its corporate customers in their battle against computer hackers.

The former UK telecoms monopoly said California-based Counterpane currently monitors 550 networks worldwide for multinational and Fortune 100 customers, and the deal would be earnings enhancing almost immediately with cost synergies.

It did not disclose the exact value of the deal, only saying it was in the “tens of millions of dollars.” An industry source put the value at around $40 million.

“While this is not a large transaction from a financial perspective, it is a very strategically important transaction to us,” President of Strategy for Global Services Maggie McClelland said in a conference call.

BT said Counterpane’s founder Schneier would continue in his role, as would Chief Executive Paul Stich. BT plans to keep the company as a separate entity for the foreseeable future.