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McAfee to stake out new markets

McAfee wants to be more than the antivirus savior of personal computers and plans to infiltrate new markets.

McAfee wants to be more than the antivirus savior of personal computers. So the company is planning to move into the enterprise business, focus on its "Internetcentric" business model, and grow its overseas business, the company said today at an analyst conference.

The company boasted about its Internet-based business model, which offers free product samples over the Internet. The company called it a low-cost marketing strategy.

"We are not in the upgrade business, we are in the subscription business," said chairman and chief executive William Larson.

Larson explained that once you have MIS employees downloading and using $1000 worth of software for free, it is a great advertising vehicle because the word of mouth is an effective way to promote products.

Once the user downloads the software, they can use it free for one month. At the end of the month, the user can buy a two-year license for all of the software and the upgrades.

"We are becoming an increasing part of the infrastructure...It will cost more to take the products out [of the system] than to renew the subscription," said Larson.

But, McAfee's main focus will remain its existing customers.

"We want to stay with existing customers. We want cross-selling and up-selling," said Larson. He added that the company will leverage its product breadth to maintain its previous clients and then increase its product offering to those existing clients.

To deal with all of the extra enterprise business, McAfee is developing an account manager force to work closely with the business clients.

The company also sees big opportunity is the overseas market. McAfee currently has 80 percent of its revenue coming from U.S. business. "We are going to invest in Europe and we'd like to see 50 percent of our business [generated overseas] within the next two or three years," said Larson.

Larson also has high hopes for the companies newest products, including its Zero Administration Kit and PC Medic, a desktop security suite. But the future of those two products remains uncertain.

The Zero Administration kit is targeted at the same market Microsoft is pursuing with its Zero Administration for Windows initiative. Larson dismissed the competition saying that Microsoft is "focusing on different markets."

The PC Medic is under fire from competitor Symantec (SYMC). Symantec filed a copyright infringement case in a San Jose, California, federal court against McAfee this week. The lawsuit charges that McAfee's PC Medic program includes a critical section of code that is identical to Symantec's CrashGuard product. Larson did not want to comment on the case.

McAfee beat analysts' earnings expectations when it reported earnings for the quarter ending in March. Net income for the quarter rose to $19.7 million, or 37 cents a share, up from $1.1 million, or 18 cents a share, in the same period a year ago, and up from 29 cents in the previous quarter.

Larson added that the company is also going to migrate toward the firewall business in an attempt to provide one-stop shopping for businesses.