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Online security key to health care venture

Entrust Technologies, which makes security and relationship-management software, forms a company to target the health care industry with transaction-based, hosted services.

Entrust Technologies, which makes security and relationship-management software, said Tuesday it has formed a new company to target the health care industry with transaction-based, hosted services.

Entrust HealthCentric will provide health care agencies with services keyed to industry-specific security regulations, so that those agencies can build their business and customer relationships through private and personalized electronic interactions, the company said in a statement.

Shares of Entrust Technologies took a major hit Tuesday. In morning trading, the company plunged more than 35 percent, down $2.66 to $4.63, after reporting it is lowering its first-quarter earnings estimate below analysts' expectations.

Analysts had been looking for a profit of 2 cents a share, according to First Call. Instead, the company said it expects to lose between 32 cents and 34 cents a share.

Privacy of medical records is an area of intense scrutiny as doctors, hospitals and insurance companies slowly, but increasingly, move toward online systems.

That movement has picked up of late. Last week, drug maker Pfizer joined with IBM and Microsoft in a venture to sell technology and services to health care companies. Late last year, seven major insurance providers made public their plans for a Web-based transaction system called MedUnite.

Online health care may yet be a lucrative business sector, but pioneers in the field are still searching for solid ground. The leader in the field, WebMD, last year laid off about 1,100 employees and last month narrowly beat Wall Street estimates with a smaller-than-expected quarterly loss.

Entrust HealthCentric stems from Entrust's acquisition of the rights to the Health care security system and services of Nashville, Tenn.-based Medtegrity. Daniel Nutkis, Medtegrity former chief executive, will serve as vice president and general manager of Entrust HealthCentric.

Financial details were not immediately available.

The move comes less than two months after Entrust Technologies announced that original chief executive John Ryan was departing. Ryan had been the Plano, Texas-based company's head since it was founded in 1996.

Entrust Technologies is looking to expand its stake in the security software market away from PKI (public key infrastructure) security software, which is used to authenticate private-transaction users. The PKI market has been growing at around 50 percent annually, though analysts have been looking for a growth rate of around 70 percent to 80 percent.