Microsoft preparing to release free anti-virus software

According to Reuters, Microsoft is getting set to release free anti-virus software for Windows to compete with the likes of Symantec and McAfee.

The software product, codenamed "Morro" after a beach in Sao Paulo, Brazil, is already being tested by Microsoft employees and a trial version will be made available "soon".

Although it is difficult to gauge the effects this move by Microsoft will have over the long term, the announcement appears to have contributed to a recent 0.5% decline in Symantec shares and a 1.3% drop in McAfee shares, while Microsoft's stock price has risen 2.1%. The anti-virus industry generates billions of dollars for companies such as Symantec and McAfee, and Microsoft has always sought to gain a foothold in that market.

The Redmond company's now discontinued OneCare product was one attempt to enter that lucrative market. Although OneCare did generate revenue directly through subscriptions, Microsoft's new anti-virus software will be free to Windows users, meaning that it, like Internet Explorer, could lead to antitrust lawsuits somewhere down the line.

FBR Capital Markets analyst Daniel Ives sees Microsoft's move as "a long-term competitive threat" to other companies operating in the anti-virus space, but he says that in the short-term the "Morro" product is unlikely to make much of a dent in the profits of those other companies.

"Morro" is likely to be targeted to compete with the low end of anti-virus products from other providers, and it will not have much of an impact on sales of full-blown security suites. According to Janice Chaffin, president of Symantec's Consumer Division, "Microsoft's free product is basically a stripped down version of the OneCare product Microsoft pulled from the shelves. A full Internet security suite is what consumers require today to stay fully protected."

The free "Morro" service should, according to Microsoft, be up and running by the end of this year. Although it is true that many anti-virus solutions from other providers have long been available free on the Internet for consumers, this move by Microsoft could well create more legal woes for the company, given its legal status as a monopoly.