Microsoft's decision to offer free antivirus software puts rivals such as McAfee and Symantec in a tough position.
To be sure, those two--and other rivals--will be able to tout products that offer a broader range of features than Microsoft plans to deliver with "Morro" next year. At the same time, "nada" is a tough price to compete against.
That raises the question of whether those companies or others may look to antitrust regulators for help. We've put queries into those companies and also posed the antitrust question to Microsoft. I'll let you know what we hear back.
One thing in Microsoft's corner is the fact there are already free antivirus products on the market, such as AVG, though typically security vendors look to upsell consumers from low-cost or free products to higher-end ones.
Microsoft appears to be getting out of the paid security software business, at least on the consumer end. (Microsoft still plans to offer paid security products for businesses).
Also, Microsoft said it plans to deliver Morro as a free download rather than bundling it with the operating system--another move that could dampen some antitrust concerns.
It's unclear whether giving away software that others charge for will ultimately be enough to justify regulatory action. Although one antitrust lawyer predicts rival security firms will complain and that antitrust authorities will listen.
"Sure, there will be antitrust issues. They're just...daring the antitrust authorities to knock it off," said Daniel Wall of the San Francisco firm of Latham & Watkins. "This is an old issue, the notion of them giving away for free products that others sell and it is absolutely guaranteed to get the attention of the antitrust authorities in Europe, Korea, Japan, and other jurisdictions."
"They're incorrigible," Wall said of Microsoft.
Antitrust regulators in the U.S. have tended to focus on harm to consumers as opposed to competitors. Authorities in Europe and Korea have taken a broader view, taking action against Microsoft for actions deemed to hurt competitors, such as bundling its media player into Windows.
Both Europe and Korea have required Microsoft to offer versions of its operating system without certain components. In this case, though, Microsoft is not talking about distributing the antivirus code as part of Windows itself.
Representatives from Microsoft, Symantec, and McAfee were not immediately available to comment.
CNET News' Elinor Mills contributed to this report.
Update 4:45 p.m. PST: Here's what Microsoft had to say.
"We are focused on addressing the security needs of consumers," Amy Barzdukas, a senior director in Microsoft's Online Services and Windows Division, said in a statement. "We will, of course, continue to comply with any government rulings."
Update 6:25 p.m.: And we got comment from security firms McAfee and Sophos.
McAfee spokesman Joris Evers, asked if his company would raise an antitrust complaint over Microsoft's move, said: "It's too early to say anything about that."
Over at Sophos--which focuses on the enterprise market and so doesn't compete with Microsoft's consumer security products--Senior Technology Consultant Graham Cluley predicted antitrust issues would not arise.
"I am no expert on such things, but provided Microsoft does not bundle 'Morro' in with its operating system I would be surprised if there were antitrust issues," he said in an e-mail. "Anything which encourages more people to run antivirus has to be good news for all of us."
Asked if Microsoft would ever consider bundling the security features into Windows, Microsoft's Barzdukas said: "I can't foresee such a time."
With Microsoft having, at the very least a "hiring chill," we decided to check in with other big tech giants on their hiring plans.
It's a little hard to get a clear picture of what other companies are doing--in part because so many have already announced plans to cut jobs. Intel's workforce is down thousands from where it was a couple years ago. Hewlett-Packard has already said it plans to shave 24,000 jobs as part of its EDS purchase, while Dell and others have also been cutting back.
Yahoo, already under pressure from competitor Google and the ugly saga of Microsoft's attempt to acquire the company, said Friday that it is bracing itself for a weaker advertising market.
"We believe it's imperative we align our cost structure with today's economic realities," said Yahoo spokesman Brad Williams. "We've been looking at ways to streamline our processes and bring more efficiencies to how we work as an organization," he said, and the company hired Bain & Co. to "help us identify opportunities for improvement."
He wouldn't confirm that layoffs are part of the plan, but payroll is a major expense, and most employees know how to read the tea leaves when they hear the word "streamline."
Though Yahoo is under pressure itself, Williams said the economy and the advertising market led to the current analysis. "The collapse of the credit markets...accelerated what had been a pretty uncertain market," he said.
For its part, Google said "We continue to hire talented people across functions for our offices worldwide." Of course, the real question is at what pace they continue that hiring.
In a meeting with reporters Wednesday, Chief Executive Eric Schmidt supplied a big dose of caution about whether there might be effects from the broader economic issues.
"It's a very dynamic situation. There is evidence credit is a problem for certain sectors. We have not yet seen any impact from it," Schmidt said. But, he added, "We might. All bets are off. Nobody knows."
Many expect TV and print advertising to be hit harder, but that doesn't mean online ads are immune. Even if individual ads or campaigns are profitable, the ad market can be hurt when customers tighten their purse strings and advertisers reduce spending.
Most other companies didn't have much new to say on a Friday afternoon, but it's fair to say that every company has got to be taking a second look at those 2009 numbers. Anyway, here's what several big names did have to say on the matter.
Dell: Dell spokesman David Frink said the company is certainly monitoring things, but had nothing new to announce. "But as you know, we've got a well publicized effort under way to reduce costs," Frink said. Dell has cut 8,500 workers from its ranks in the last four quarters. That said, Frink said Dell "will selectively hire in areas that are important."
HP: "Workforce rebalancing is a continual activity across our businesses and geographies to ensure that resources are aligned with the opportunities in the market," HP said in a statement. "We expect that our overhead costs, which include IT, real estate and shared support functions, will decline more from (fiscal 2007 to fiscal 2009) than they did from (fiscal 2005 to fiscal 2006)."
IBM: "We haven't announced any freeze," an IBM representative said. As of right now, nothing has changed at IBM. We continue to hire in key skills areas."
McAfee: "McAfee has not changed its hiring process and continues to make strategic investments in its personnel," A company representative told CNET News. "We continue to add to our headcount. McAfee has grown significantly over the past quarters."
Microsoft: "Microsoft will continue to grow and add thousands of new jobs this year, but given the current economic environment, we are taking the prudent step of reviewing our hiring plans and will make some adjustments as appropriate," spokesman Lou Gellos said in a statement. "We are optimistic about our prospects for growth and will continue hiring the talent we need to ensure our ongoing success."
Intel: Declined to comment, citing a pre-earnings announcement quiet period.
Apple: Declined to comment, also citing a pre-earnings quiet period.
Oracle: Declined to comment.
CNET News' Charles Cooper, Stephen Shankland, and Robert Vamosi contributed to this report.
Since November, Microsoft has been slowly rolling out an update to its Windows Live OneCare security software. Although the update was designed to bring in new features, such as the ability to monitor the health of multiple PCs, some say the new version has brought only headaches.
Robert Webb of North Carolina said he started having problems from the moment his software was upgraded in early December.
"My main problem has been that OneCare does not always start when the computer is booted," Webb said in an e-mail interview. "It has to be manually started."
Microsoft's online forums are buzzing with a host of complaints about the new version, with many people unable to get the software to work.
Microsoft confirmed that it is working on that problem.
"We are aware that some users are experiencing an issue with Windows Live OneCare when they start up the service after installing (version) 2.0," Microsoft said in a statement to CNET News.com. "The issue is being worked on and currently affects a very limited number of customers (about 1 percent of the install base), each of whom we thank for their patience."
In an interview Thursday, Microsoft lead product manager Larry Brennan said that, in total, the problems aren't causing a significant disparity compared with users' experience with the older version.
"We do monitor the overall status of the service," he said. "We can see that the servicing statistics for 2.0 are comparable to the servicing statistics for (version) 1.6."
Brennan touted the new features, such as automated printer sharing and centralized backup, as key improvements and said that with any upgrade, there are bound too be some people who have problems. Brennan said Microsoft is about halfway through migrating OneCare users to version 2.0 and that the company is continuing to automatically upgrade customers, despite the complaints.
OneCare, which was introduced in May 2006, is Microsoft's first entry in the consumer antivirus software business and competes with consumer software from Symantec, McAfee, and others.
Stephen Boots, the Microsoft Most Valued Professional who moderates the OneCare forum, has been trying to address many of the issues online, but has been suggesting those with other issues contact Microsoft's customer care.
"There were too many problems with the v2 upgrade and too many remain now," Boots wrote in a post on Friday.
For Webb, the problems have shifted his OneCare experience from positive to negative.
"I liked OneCare before these problems appeared because it was hassle free and not a resource hog," said Webb, who has been using the program for a year and a half and renewed his paid subscription last July.
Update: A Microsoft representative said on Friday that the company is planning to push out an update to version 2.0 on January 31 that it hopes will fix many of the problems that users have been encountering.
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