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Network Associates may slow acquisitions

The software company's CEO says the firm doesn't need to acquire any new products for now; meanwhile, the SEC continues to investigate previous acquisitions.

CEO William Larson of Network Associates appears to be slowing the acquisition binge that has seen his company buy six security and utility software companies in the last 18 months.

"We don't believe there are any products that we need to acquire," Larson said today after his presentation at the BancBoston Robertson Stephens investor conference in San Francisco. He noted that Securities and Exchange Commission rules prevent companies from making statements about their futures, however.

Larson also had no comment today on a continuing SEC investigation into two Network Associates 1998 acquisitions. In January, Network Associates announced that new SEC rules on acquisitions could reduce its earnings after it receive an SEC letter asking for an explanation of how the company writes off acquisition expenses.

The SEC rules apparently affect Network Associates' purchases last year of Magic Solutions and Cybermedia, according to a Reuters report in January. Larson said last month that Network Associates could cut costs to offset any new charges the SEC adds.

Larson also said the company plans to ship new "monitoring" software for intrusion detection by mid-year. Network Associates' previous products in that area include code licensed from WheelGroup, which Cisco Systems acquired last February.

When Network Associates' license for the software for monitoring suspicious activity on a corporate network expired, Cisco did not renew it.

Larson also said the "smart portal" Network Associates previewed for advanced PC users in December, called McAfee Online, could turn a profit this year. "We have to decide; the general manager wants it to make money, but I'm thinking maybe we need to invest more," Larson told CNET News.com.

McAfee Online is designed for PC users to tune up their machines with Web versions of Network Associates' antivirus and utility software and for hosted email, calendars, file storage, and document collaboration. The site will rely primarily on user subscriptions and software sales for revenue.

Larson also said that GTE's government systems group has joined a Network Associates-led collaborative research effort in network security.

Other members of the Security Research Alliance, announced last month, include Cisco, Lucent Technologies, and Sun Microsystems. The consortium will look at security problems that may emerge in three to five years.