Microsoft plans new PC security service

Microsoft Corp. said yesterday it plans to launch a new computer security service in June, marking the world's biggest software maker's entry into the fast-growing consumer anti-virus market.

Microsoft's Windows OneCare Live, a subscription-based, self-updating service, will push the software giant into competition with consumer security providers Symantec Corp., McAfee Inc. and Trend Micro Inc.

The new security product represents one of Microsoft's first steps into its Web services strategy, which aims to deliver software and services over the Internet in competition with rivals Google Inc. and Yahoo Inc.

Microsoft said it aims to fill a void in the security market by offering an all-in-one service that includes anti-virus, firewall and anti-spyware software along with backup and computer performance maintenance tools.

"As I look into this market right now, there is nobody else in this category," said Dennis Bonsall, director of Windows OneCare Live.

The Windows OneCare Live will be available via retailers and the Web for an annual fee of $49.95 (29 pounds) for up to three computers, targeting consumers and small businesses.

Redmond, Washington-based Microsoft started offering a test version of the security and maintenance service in November and said it has nearly 200,000 "beta" users of the product. The company will offer an introductory $19.95 a year price for test users who sign up in April.

Gregg Moskowitz, an analyst at Susquehanna Financial Group, said Microsoft's long-awaited entry into a multibillion dollar security market pegged to grow at 10 percent over the next two years would likely hurt vendors like Symantec and McAfee.

"The presence of a new and very powerful competitor -- even with no sort of experience or positive type of traction in the market -- is going to cause some ripples," he said.

Established players in the PC security industry are already bracing for Microsoft's entry by bundling anti-spyware protection with anti-virus software. Last week, Symantec's CEO John Thompson said the company would make investments to fend off Microsoft and any other potential competitors.

Symantec, the world's biggest security software company, said it plans to offer its own all-in-one subscription-based software product code-named "Genesis" that it expects to introduce later this year.

Most security products are sold as boxed software and then charge a renewal fee, but Microsoft said it expects consumers to favour a simpler and easier protection process that delivers updates and support through the Internet.

The new security product falls under MSN, Microsoft's Internet business. MSN accounts for only about five percent of Microsoft's total revenue, but the segment is expected to play a large role in the company's Web services strategy.

Beefed-up security is a core feature Microsoft's new Windows Vista operating system, due out in the second half of 2006, and the latest version of its Internet Explorer browser which will be bundled in with Vista.

Shares of Microsoft fell 23 cents to $26.94 in Nasdaq trade, while Symantec's stock rose 21 cents to $16.95 and McAfee lost 5 cents to $22.30.

(Additional reporting by Michael Kahn in San Francisco)

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