This message is in MIME format. The first part should be readable text, while the remaining parts are likely unreadable without MIME-aware tools. Send mail to mimeat_private for more info. --------------0DBA47A16CCA404EA07C3015 Content-Type: TEXT/PLAIN; CHARSET=us-ascii Content-ID: <Pine.SUN.3.96.990105174439.15813Yat_private> ForwardedFrom: darek milewski <darekmat_private> http://www.nytimes.com/library/tech/99/01/biztech/articles/04deal.html January 4, 1999 New York Investigation Firm Plans to Buy Internet Consultant By JOHN MARKOFF Anticipating an era in which fighting computer crime will be as big a business as Internet commerce, Kroll O'Gara Co., the private security and investigation company in New York, said it would announce Monday that it was acquiring Securify Inc., a small Silicon Valley computer-security firm, for $55.2 million in stock. Securify is among the small but rapidly growing consulting firms that have sprung up as tens of thousands of corporations connect to the Internet. Its acquisition by Kroll shows that security companies are beginning to recognize the rapidly increasing risks in cyberspace. The deal, which was finalized after the close of the market on Thursday, the last day of trading in 1998, will permit Kroll to expand its small business in computer-security consulting, computer crime and computer-fraud prevention. Kroll O'Gara will acquire Securify in exchange for 1.4 million shares of stock, totaling $55.2 million. As part of the deal, an additional 211,000 shares will be used as incentives to persuade Securify employees to stay with the company. Kroll executives said the company had explored a large part of the computer- security industry before settling on Securify, based in Mountain View, Calif. "We're very familiar with that community," said Jules Kroll, chief executive of Kroll O'Gara. "We felt the credentials and bona fides of the people at Securify are a combination of intellectual and academic as well as those who have been out there doing it in the cyberstreets. It's a nice combination." Over the last decade, he said, Kroll's traditional business of investigating business fraud has become increasingly computer-oriented. "We've been on the fringes of the business for a long time," Kroll said. "It became abundantly clear to us that we could not grow in the business by making incremental hires." Securify was founded earlier this year by two computer-security experts, Tahar Elgamal and Dan Kolkowitz. Elgamal had been chief scientist at Netscape Communications Corp., where he helped create Internet security standards widely used in commercial transactions online. Kolkowitz has computer-security experience at Silicon Valley companies, including Tandem Computers and Bridge Communications. As both large financial institutions and small Internet start-ups begin to rely on the Internet for business transactions, risks are being created that are not always adequately addressed by available hardware and software. Securify has focused both on auditing companies' hardware and software for potential risks and on assisting those who have been victims of either outside electronic intruders or insider computer fraud. "We have specialized in developing encryption, authentication and monitoring technologies," said Kolkowitz, who is Securify's vice president for engineering. The company will provide Kroll with both a business and intellectual presence in Silicon Valley, he said. The complexity of today's Internet-based financial systems has left many financial institutions unable to adequately assess risks, he said. For example, many companies are now creating so-called virtual private networks, which allow different branches to communicate through the Internet. However, this does not entirely secure a company's computer network activities, which may remain vulnerable to insider fraud, the largest type of computer crime. Traditional corporate security issues have been vastly complicated by computer networks, Kroll said. He cited the Year 2000 computer problem as a potential new area of vulnerability. In the last-minute dash to fix the problem, many companies have been hiring temporary workers and consultants -- often without properly considering the consequences of providing access to their computer systems, he said. --------------0DBA47A16CCA404EA07C3015-- -o- Subscribe: mail majordomoat_private with "subscribe isn". Today's ISN Sponsor: Internet Security Institute [www.isi-sec.com]
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