Microsoft to Acquire Anti-Virus Software Maker

Deal with Sybari Software would launch Microsoft into direct competition with Symantec, McAfee and others


SEATTLE -- Microsoft Corp. announced plans Tuesday to acquire a company whose software aims to protect corporate networks from e-mail borne threats and said it would sell a product based on the technology.

The deal for Sybari Software Inc., along with word that Microsoft is gearing up to release its first set of commercial antivirus products, could hurt security companies including Symantec Corp. and McAfee Inc., whose stock prices fell.

Terms of the deal, the latest in a series of security-related purchases by Microsoft, were not disclosed. Sybari is privately held but filed papers last year for an initial public stock offering.

The Sybari acquisition will produce Microsoft's first official separate paid antivirus offering, said Mike Nash, corporate vice president of Microsoft's Security Business and Technology Unit.

Sybari has about 10,000 clients and is based in East Northport, N.Y. Its software scans businesses' e-mail to try to ward off attacks.

Nash said Microsoft would make the Sybari-based product, geared toward business customers, available under the Microsoft brand soon after the deal closes.

Microsoft has not yet said how much the new product will cost.

In an interview, Nash said Microsoft would subsequently release other products, for both consumers and business users, aimed at protecting computer desktops from Internet-based attacks. He could not yet say exactly when those would be released, however.

Symantec shares fell $1.51, or 6.4 percent, to close at $22.09 in Tuesday trading on the Nasdaq Stock Market, while shares in McAfee dropped $2.14, or 8.2 percent, to close at $23.82 on the New York Stock Exchange.

Sybari is just the latest company Microsoft has bought so it can make its own security products.

It purchased a Romanian antivirus firm, GeCAD Software Srl., for an undisclosed amount in 2003. Then, in December, it bought Giant Company Software Inc., which makes tools to remove spyware, software that monitors a person's computer habits, slows down computers, triggers pop-up ads and worse.

Earlier this year, Microsoft began offering free programs to remove viruses and spyware. It plans to eventually charge for more sophisticated antivirus tools, and it has said it may one day charge for spyware removal products as well.

The moves all come amid a continued onslaught of attacks against Microsoft's dominant Windows operating system and other products. As the attacks tangle up businesses and harm consumers, the company has made bolstering security a priority.

Until now, however, those efforts have involved free offerings, including monthly security patches and a major security upgrade to the Windows XP operating system.

Offering more sophisticated security tools for a fee could threaten companies that sell similar products.

Enrique Salem, a Symantec senior vice president in charge of security products, downplayed Microsoft's latest move into his company's turf.

He said Symantec's big business customers want products that can work with multiple platforms, including open-source Linux as well as Windows, and argued that the Sybari-based Microsoft offering will only solve part of a client's problems.

Microsoft shares rose 8 cents to close at $26.24 in Tuesday trading on the Nasdaq Stock Market.