AVG recently announced the acquisition of a virtual private network provider (VPN) Privax, a leading global provider of desktop and mobile privacy services for consumers. The announcement was made public in blog posts by AVG and Privax. The reported selling price is $40 million with a potential $20 million bonus if certain growth goals are met within a specific time frame.


[image via News.avg.com/press]

[image via News.avg.com/press]

Not long after the announcement was made Privax dropped the one-month subscription price to its premium VPN service from $11.95 to $9.95. The prices for 6 month and 12 month subscriptions have remained constant. This move is clearly an attempt to grow their user base and meet their acquisition goals in order to pocket that $20 million bonus.

Privax has 250,000 paying customers and millions of users on their free products. The price drop is  a strategic move in an attempt to convert users into paid subscribers through the lower price tag.  AVG has 202,000,000 reported active users. Marketing Privax to their own customer base could lead to conversions as well.

“Privacy is the new currency of the digital era, particularly as the Internet population is expected to double over the next five years,” said Gary Kovacs, Chief Executive Officer, AVG Technologies. “As we connect through more and more devices, our privacy is becoming increasingly violated. At AVG, we fundamentally believe that it is a user’s choice of how and when to share their private information. With this acquisition, we will immediately be able to provide new and innovative privacy and security services to hundreds of millions of users world-wide.”

According to both AVG and the HMA! blog post by Cator, “For you, the customer, nothing will change; you will continue to enjoy the service provided by HMA! and we will continue to operate independently. As part of the AVG family, HMA! will have access to the expertise and resources of a major security company which will allow us to further improve our products.”

VPN Creative has been recommending Privax/HideMyAss for several years now and believes that AVG, best known for their antivirus software,”has a tremendous opportunity to become a market leader in the growing VPN industry…” with the acquisition. What do you think?