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Microsoft Offers Anti-Spyware Software

Analysts Say Move Signals Interest in Security Market

By Mike Musgrove
Washington Post Staff Writer
Friday, January 7, 2005; Page E05

Microsoft Corp. announced yesterday that it is giving away software designed to help protect Windows users from spyware, one of the fastest-growing of Internet annoyances.

The release marked a new foray for the software giant and prompted several analysts to suggest that the company would eventually enter the market for computer security software.

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Share prices for antivirus companies such as McAfee Inc. and Symantec Corp. fell following the announcement. At the close of the market yesterday afternoon, Symantec was down $1.86, or 7.4 percent, to $23.18 a share. McAfee was down $1.48 to $25.15, a 5.6 percent drop from the previous day's close.

Spyware is a general term for programs that surreptitiously transmit information about a computer user via the Internet. Some versions allow interlopers to change Web home pages or shove pop-up ads onto people's screens as they surf the Web. The software can slow a computer's performance so much that it becomes practically unusable.

The software generally comes, like computer viruses, through e-mail or unwitting downloads of software carrying the troublesome programs.

Microsoft's anti-spyware technology comes from Giant Company Software Inc., a New York-based computer security company that Microsoft acquired in December. Now dubbed Microsoft Windows AntiSpyware, Giant's former product is being released as a free download at Microsoft's Web site (www.microsoft.com/athome/security).

Microsoft said the software is still in unfinished, or "beta," form and would not say when consumers can expect a final product.

Computer maker Dell Inc. has said that as many as 20 percent of recent calls to its support centers are spyware-related. Amy Carroll, director of product management for security technology unit at Microsoft, said yesterday that one-third of the Windows software crashes reported to the company can be traced back to spyware programs.

The antivirus software industry takes in about $3 billion in revenue, but research firm IDC estimates that fewer than 25 percent of consumers keep their antivirus and anti-spyware software updated.

The sudden growth of spyware has had the side-effect of quickly creating a new market to address the hazard. Software maker Computer Associates International Inc., for example, recently began selling an anti-spyware product called PestPatrol after purchasing a company by the same name.

George Kafkarkou, senior vice president in charge of consumer products at Computer Associates, said that Microsoft's entry into the anti-spyware arena brings "validation" to the marketplace for products such as PestPatrol; Kafkarkou asserted that "it'll take companies a lot of time to catch up" with his company's anti-spyware product.

Brian Burke, analyst at IDC, said he expects Microsoft to sell a more comprehensive antivirus software product later this year or early 2006.

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