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Mobile email firm Visto buys rival from Motorola

  Privately held mobile email provider Visto has agreed to buy rival Good Technology from struggling Motorola Inc to expand its offering and grow scale in a market dominated by Research in Motion.

Terms of the transaction were not disclosed. Motorola bought Good Technology in 2007 for more than $400 million.

Blackberry-maker RIM created the market for mobile email and it has a dominant position in the corporate sector, and with Nokia and Microsoft also targeting mobile email pressure on smaller vendors like Visto is growing.

“The acquisition of Good Technology will give Visto an enhanced presence in the North American market and greater scale which is now essential to compete with Microsoft and RIM,” said Geoff Blaber, analyst with CCS Insight. “This move draws clear similarities with Nokia’s decision to pull back from its Intellisync enterprise solutions business.”

Last year Nokia ceased its corporate email offering it had bought in a $430 million acquisition of US firm Intellisync, but strengthened its push for consumer email.

Motorola, which has been struggling to stem market share losses in its mobile phone business, said it is focusing on its core operations with the deal. “We believe that this transaction is in the best interest of our customers, employees and shareholders,” Gene Delaney, president of Motorola’s Enterprise Mobility Solutions, said in a statement.

Visto said it expects the deal to close by the end of February. Visto’s investors include Oak Investment Partners, Draper Fisher Jurvetson, Altitude Capital Partners, Meritech Capital Partners and Rustic Canyon Ventures.

Good Technology specializes in offering wireless messaging, mobile virtual private network (VPN) data access, device management and handheld security for enterprise customers. (Reuters)