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2HRS2GO: Virus boosts security software vendors

Every time there's a virus scare, someone floats the idea of buying Web security stocks.

Have an opinion on this?

"I was thinking this virus thing might be a hook for a column, security stocks rock or something," flashed the Instant Message from my boss.

Funny he mentioned that. At the time, I was wondering if I'd successfully eliminated all traces of ILOVEYOU from this laptop.

Yup, it got me. What can I say? I clicked on an attachment from someone whose material I would normally trust.

My own stupidity is to blame, obviously. I mean, come on: "ILOVEYOU"?

A columnist should be suspicious about any professions of love. Especially the attached kind.

But what's done is done. Now I'm supposed to tell you that Web security stocks are great buys?

This may be a silly question, but: why should I reward failure?

If the Norton antivirus scanner on this ThinkPad had picked up the virus before it infected the machine, I might be inclined to say nice things about Symantec (Nasdaq: SYMC). If the Network Associates (Nasdaq: NETA) download site for Dr. Solomon's Virus Scan didn't keep returning "Server Too Busy" or "Microsoft OLE DB Provider for ODBC Drivers error" messages, perhaps I'd drop the company a nice mention.

Ok, I'm not being fair. It's hard to develop a filter for a virus before it's been discovered. And it's unreasonable to expect a company to immediately boost its bandwidth for an unexpected surge of downloads.

Nevertheless, I remain amazed that people turn to security stocks after each of these virus appearances. Symantec and Network Associates each had gained 4.7 percent by early afternoon trading today, despite a flat showing from the overall Nasdaq.

Network Associates and Symantec aren't necessarily bad businesses. Network Associates seems well on its way to undoing the damage caused by the company's foolish suite strategy of last year. Symantec, although its enterprise revenue growth may be going slower than some observers would like, is going in the right direction and remains a consistent performer.

But it's not as if today's loving virus will change the long-term growth rate for McAfee or Norton virus scanners. They already have reliable growth, to be sure, but consistency by itself doesn't push stocks higher.

I suppose shareholders will take whatever gains they can get, since the stock prices of SYMC and NETA gradually slid over the last couple of months.

Unfortunately, these security scares never last. Symantec and Network Associates investors can only hope this one keeps going until the larger tech market recovers. 22GO>