RIM Doubles Bid For Certicom

Research In Motion isn't going to give up security firm Certicom without a fight, and it has increased its purchase offer to trump VeriSign.

Certicom specializes in the development of elliptic curve cryptography, or ECC, which is used in many BlackBerry security operations. The BlackBerry maker had been trying to purchase the security firm for the last two years, and it eventually made an unsolicited takeover bid for about $53 million.

Certicom executives held out for a higher bidder, and it was successful as VeriSign swooped in with an offer of about $72 million. VeriSign said the deal would be beneficial for the marketplace because it would enable the company to combine its certificate services infrastructure with Certicom's encryption technology.

But RIM doesn't want to let Certicom go, and it has boosted its offer to about $106.5 million. VeriSign will have until Feb. 11 to amend its offer, but many industry watchers don't expect it to as RIM will likely continue to raise its offer until it acquires Certicom.

While RIM has targeted the casual market with handsets like the BlackBerry Pearl and Storm, the company still generates a lot of its revenue from the enterprise market. The company is the market leader with businesses mainly due to the security capabilities of its BlackBerry handset, but it's facing stiff competition from Apple's iPhone, Nokia's N97, and the T-Mobile G1. Despite offering only one handset, Apple outsold RIM in smartphones last quarter, and mobile workers increasingly want to use their iPhone 3G with corporate networks.

But some IT departments are still hesitant to let Apple's handsets access their corporate networks because of security concerns. This acquisition could create tighter integration of Certicom's products with BlackBerry devices, as well as lead to future handsets that are designed with stronger ECC protocols.

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