Mcafee Buys WiFi Firm Wireless Security Corp.

By Spencer Swartz

SAN FRANCISCO (Reuters) - McAfee Inc., the world's second-biggest maker of security software that protects personal computers from Internet viruses, on Thursday said it has bought software maker Wireless Security Corp. and continues to look for other acquisitions.

McAfee did not disclose how much it paid for Wireless Security, which gives McAfee its first foothold in securing popular short-range WiFi networks used by consumers and business travelers in airports and coffee shops.

McAfee bought all the outstanding stock, technologies and assets of Palo Alto, California-based Wireless Security Corp., with which McAfee already has a partnership. McAfee's stock traded down about 1 percent in New York.

George Samenuk, McAfee chairman and chief executive officer, told analysts and investors in New York that McAfee, which has about $1 billion in cash, continues to search for acquisitions of both publicly traded and privately held companies.

"We're looking at both .... We met for several hours last night (to talk about) what other directions we should go down," he said.

Samenuk said consolidation in the security software industry would continue and said there was still "tremendous opportunity" from customers looking to buy products to secure their networks from Internet menaces like spyware, which can secretly monitor a computer user's activity.


The U.S. House of Representatives in late May voted to establish new penalties for purveyors of spyware.

Samenuk also said it is "staggering" how many calls McAfee gets from privately held firms about wanting to sell themselves.

Investors in these companies are coming to realize they should sell the firms now due to unpromising future growth prospects, Samenuk said.

Many analysts have expected consolidation as companies opt to buy security products from fewer vendors to lower costs and the complexity of integrating the products they buy.

All of Wireless Security's software developers will join McAfee, said McAfee executive vice president Bill Kerrigan. He declined in an interview to say how many employees Wireless Security has.

Kerrigan said he did not expect McAfee, based in Santa Clara, California, to make other acquisitions in the WiFi security area in


WiFi connections have grown increasingly popular in recent years, especially among business travelers who use the networks to connect to the Internet and into their company's internal networks.

But such connections have also become more prone to hackers trying to intercept personal information, like passwords and credit card data, over the wireless signals.

Products from the acquisition will include a downloadable offering for consumers and a version for small businesses that will be part of a bigger suite of several computer security products McAfee offers, Kerrigan said.

Copyright 2005 Reuters Limited.

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