[ISN] Network Associates Up For Sale, Sources Say

[R. A. Hettinga]

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Date: Tue, 22 Jun 2004 05:58:53 -0500 (CDT)
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Subject: [ISN] Network Associates Up For Sale, Sources Say
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http://www.crn.com/sections/breakingnews/breakingnews.jhtml;jsessionid=UBOYD1ZT3NRE0QSNDBESKHA?articleId=22101131

By Dan Neel
CRN
Jun. 21, 2004

Network Associates is for sale, and Microsoft is rumored to be the
buyer.

The maker of McAfee antivirus and security products has not made it
public, but a "for sale" sign figuratively hangs from Network
Associates' front door, according to Wall Street sources and channel
partners.

A public announcement concerning either the pending or closed sale of
the company to a buyer could come as early as July 1 when Network
Associates also plans to announce layoffs associated with the
company's for-sale status, these sources said.

Network Associates executives declined to comment and would neither
confirm nor deny that the Santa Clara, Calif.-based company is for
sale or planning layoffs.

Network Associates' reseller partners across the United States said
more than a few of the company's field representatives have recently
begun circulating resumes. "A lot of [Network Associates] salespeople
have opened up feelers for where they are going to land," one partner
said.

Some Network Associates employees gave partners July 1 as the date
Network Associates planned to execute the layoffs. The partners asked
to remain anonymous.

Microsoft enters the picture as a potential buyer based on the
Redmond, Wash.-based software giant's desire to ascend to a level in
the security market competitive with Network Associates rivals such as
Symantec, Computer Associates International and Trend Micro, sources
said.

Microsoft is armed with a number of antivirus tools for Windows and is
rolling out a next-generation application layer firewall, a VPN and a
Web cache solution. But possession of Network Associates' extensive
intellectual property would complete a security offering for Microsoft
that could go head-to-head with Symantec, CA, Trend Micro and others.
Microsoft representatives said it was policy not to comment on the
company's acquisition plans.

Still, Microsoft may also be the only willing buyer, Wall Street
sources said, as few companies with the wherewithal to purchase
Network Associates are interested.

It appears that Network Associates has been grooming itself to fit the
bill for an acquisition by Microsoft, many Network Associates partners
said.

One partner, who is also a veteran of the Digital Equipment
Corp./Compaq merger, said the signs coming from Network Associates are
similar to that of pre-merger DEC, citing Network Associates' sale of
its PGP encryption product line, its Gauntlet firewall business and
most recently its Sniffer network monitoring division. The partner
said Network Associates' downsizing was exactly what DEC did in order
to fit within Compaq. "It was a divestiture of all the things Compaq
didn't want," the partner said.

The sudden, announced departure of Donna Troy, Network Associates'
executive vice president of worldwide channel sales, and the sudden,
unannounced departure of Gary Brand, director of channel sales, each
resonated with partners as signs of impending change.

At Network Associates' recent Partner Symposium in San Antonio
partners were repeatedly encouraged to make sure their product
licensing was up to date, another sign that the company was trying to
set its house in order prior to a sale, partners said.



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-- 
-----------------
R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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