When Being an “A” Company Rates a “D”. AV-Comparatives Releases “File Detection Test of Malicious Software” Report

Not a stellar performance by three firms beginning with A in AV-Comparatives March “File Detection Test of Malicious Software.”  Avast – 20th, missing 2.3% of the samples.  AVG Technologies – 21^st, misses 2.5% of the samples, and AhnLab 22^nd, missing 11% of the samples.  Baidu broke the A’s stranglehold on the bottom by leading all companies with 111 false positives, followed by Avast with 95.

Sixteen products did receive AV-Comparatives’ three star designation, led by Kaspersky, F-Secure, and eScan, respectively.  Avira, another A company, also received three stars. 

AV-Comparatives takes care to point out that for this test, “Although very important, the file detection rate of a product is only one aspect of a complete anti-virus product.  AV-Comparatives also   provides a whole-product dynamic “real-world” protection test, as well as other test reports that cover different aspects/features of the products”.

 

The “Whole Product Dynamic Real World Detection" and “File Detection Test of Malicious Software”  tests   are both   available on the AV-Comparatives web site, www.av-comparatives.org

One interesting thing about the products tested in this report is that nine of the engines under the hood in testing were licensed from two companies, BitDefender and Avira.  Details are available in the report.  BitDefender  has an overall detection rate of 99.5%.

About AV-Comparatives

AV-Comparatives is an independent not-for-profit organization offering systematic testing that checks whether security software, such as PC/Mac-based antivirus products and mobile security solutions, lives up to its promises.  Using one of the largest sample collections worldwide, it creates a real-world environment for truly accurate testing. 

AVG Technologies CEO JR Smith Resigns

AVG Technologies' stock fell 11 percent on Friday with the resignation of AVG Technologies CEO JR Smith.  This was the antivirus and internet security vendor’s biggest one-day drop since they went public with their IPO just over a year ago. AVG was downgraded on 3/12 by Morgan Stanley and the stock dropped another  10.3%.  http://finance.yahoo.com/news/avg-technologies-falls-analyst-downgrade-191512922.html

 “JR has been a visionary leader for AVG.  He transformed the company from a small European antivirus company to a successful publicly traded global leader in PC and mobile solutions,” said Dale Fuller, chairman of the supervisory board of AVG. Smith will remain as CEO until a replacement is named.  Chief operating officer John Giamatteo runs day-to-day activities. http://online.wsj.com/article/BT-CO-20130307-715759.html

 

“During my six years as CEO I am proud of what we’ve accomplished: substantially growing the customer base, delivering strong financial performance, successfully leading our IPO and building a world class business and management team,” said Smith in a statement.  http://www.fool.com/investing/general/2013/03/07/avg-ceo-resigns.aspx

Revenue for the fourth quarter of 2012 was $95.2 million, compared with   $74.3 million in the fourth quarter of 2011, an increase of 28%.  For the fiscal year 2012, revenue was $356.0 million, compared with $272.4 million in 2011, an increase of 31%.  User numbers were 146 million at December 31, 2012, an increase of 38 million, or 35%, compared with the prior year.  The company is becoming increasingly more dependent on platform revenue (Google and Yahoo).  http://www.darkreading.com/vulnerability-management/167901026/security/news/240150252/avg-technologies-announces-change-to-executive-leadership-team  Few of the reports on latest revenues have pointed out that net income dropped by about 1/2 in fiscal 2012.

AVG Technologies during  the JR Smith Years

Market Share - The installed base first went up, then market share decreased (on the laptop/PC side) as measured by OPSWAT (hello free Microsoft AV).  At one point during Smith’s tenure, they claimed the fourth largest installed base.  Installed base is up again because of tablet/smartphone installations (in part through deals with Huawei in India, and Samsung in the UK).  Downloads on CNET were close to 2 million weekly for a while.  Currently, Avast is ahead of them, with Avira trailing.  Microsoft is ahead of all three. 

Product Line(s) – The number of products increased during Smith’s tenure to include    parental protection (acquisition), cloud storage (acquisition), mobile security (acquisition, initially), PC Tune-up, and AVG Cloud care.  It’s increasingly more difficult to be innovative in consumer internet security as many firms were offering multiple products each with their own permutations of similar functionality, not all related to security.  Buying versus making is a valid business decision.  AVG Technology was late to the game in adding additional functionality to their suites.  They were late in getting involved in the mobile market. 

Toolbars?  Mixed reaction by the consumer marketplace, particularly when the “yes” option is clicked for you. The internet is filled with instructions on how to uninstall various firms’ toolbars.  Google appears to be encouraging firms to move away from the default being opt-in. More revenue through secure search? Maybe........

Product quality – Not the CEO’s responsibility.  The paid products tended to be middle of the road among those tested.  Sixteen out of twenty in a September 2012 AV-Comparatives test.  Fourteen out of Twenty-one in a late 2012 AV-Comparatives Whole Product Dynamic Real-World Protection Test.  10 pass and 2 fail in the las 12 Virus Bulletin VB100 tests they participated in.  The free product has been a PC Magazine favorite. 

Marketing   - mixed.  “We protect us.”  Bad.  We needs instruction in grammar!  “How many toothpicks to stop a tiger?”  Interesting.  An unlimited cloud storage product with a limit when you read the fine print? Come on, marketing people.  Switch to us for  free.  Been there.  Done that.  Amoeba like Facebook friend creatures?  Frightening. 

Product Churn – The bane of every free product.  When you have zero switching costs, it’s easy to switch to the next product.  Autorenewal? Symantec and McAfee got their wrists slapped $$$ for making it hard to cancel.  Other vendors were better about it. 

AVG has  obtained the usual product certifications  with West Coast Labs  and ICSA.  AVG   won SC Magazine and Info Security Product Guide Global Excellence awards in 2010.  Quiet since then. 

US presence - US headquarters has been a game of musical chairs.  Florida.  Then Boston.  Now San Francisco.  San Francisco doesn’t count as Silicon Valley.  However, the employees are much closer to SF Giants games.  You see the AVG’s products in big box office supply stores like Staples and Office depot.  The number of facings is only a fraction of those of Symantec and McAfee.  Consumer AV is very much an online purchase, unless you’re going for the free paid versions (after rebates), that always appear when people start purchasing tax software. 

The IPO (Initial Public Offering) – This wasn’t a stellar IPO for   AVG when they went public in February 2012.  The target range was around 16 to 18.  The stock closed around $13 on its first day.  Blame the smartest people in the room for less than stellar number crunching.  The current stock price as of March 11, $13.75.  The stock has been as low as in the 9’s and has broken 16.  Praha based competitor Avast filed for an IPO and then cancelled.  Kaspersky has decided not to go public for the time being.  It did take the longest time after the rumor mills started about the IPO.  The date, whether it was going to be on NASDAQ, NYSE, London Exchange, or others.  Stock price as of March 11 - $13.62.

Like many firms, the company has benefited from having a presence in the Netherlands (dual headquarters with the Czech Republic (better beer) and Ireland (that tax reduction thing) http://kensek.blogspot.com/2012/04/double-irish-with-dutch-sandwich-yummy.html   

But then, larger firms just park money overseas.  By sheltering their assets overseas, Silicon Valley companies such as Apple, Google, eBay, and Hewlett-Packard are able to reduce their annual taxes in some cases by billions of dollars, according to a Center for Investigative Reporting analysis of the 50 largest firms’ financial statements filed in 2012.  http://blogs.kqed.org/newsfix/2013/02/13/cisco-apple-hp-oracle-google-avoid-paying-billions-in-taxes/

 

In the end, an AVG (A Very Good) run for Smith.  After all, during his tenure, how many CEO’s did HP have?  How many did Symantec have?  No stories about “escorts” showing up at parties in Las Vegas.  No children being pulled on stage to sing at company all hands meetings.

Czech funk-soul band Monkey Business may now have to find other corporate gigs.

RSA 2013 San Francisco - Where the World Talks Security

The RSA 2013 San Francisco security trade show  takes place  at Moscone Center February 25 through March 1.  “Where the World Talks Security” is the theme of this year’s show.  http://www.rsaconference.com/events/2013/usa/index.htm

 

Near the bottom of this blog is information on getting a free RSA  pass (exhibition hall) from Ahnlab, Zscaler, or Sophos.

The show has grown in size, with over 350 companies exhibiting.  The exhibition hall area will be open Tuesday through Thursday from 11am to 6pm (3pm on Thursday) for individuals with a full conference pass; there will be 275 different sessions to attend across 22 tracks.  Threats are evolving.  The cyber criminals are getting more creative. 

Up until several years ago, if you said “APT”, the brightest people in the room would say, “Advanced Placement Test.”  Now they are saying, “Advanced Persistent Threat.”  A number of security pundits are saying that traditional defenses are ineffective against today’s more sophisticated threats.  Here is your chance to learn about what companies are doing to protect individuals and companies against these. 

A number of security vendors may not have booths.  Look for stealthy meetings to be held at the bar area at the W Hotel, and way too many luncheons to at the Thirsty Bear Brewery on Howard street.  Some stealthy meetings may be held as far away as the Clift Hotel. 

For those just going for the exhibits, a great number of vendors always have   presentation theatres in their booth areas.  These can be quite educational, as well.  Exhibition pass holders are able to attend the keynotes Tuesday through Friday, I believe.  There are a number of keynote addresses at RSA 2013.  The final keynote this year will be 66^th Secretary of the United States, Condoleezza Rice, on Friday afternoon.   Go to the RSA site to learn about what talks are being give, and who the other keynote speakers are. 

Thursday is the least crowded day in the Exhibition Hall, as vendors will go through the ceremonial exchanging of the tchotchkes with other vendors.  Before going on your own personal tchotchke run, ask yourself, “Do I really need another 15 trade show tee shirts?”  If you do not attend on Tuesday, you will miss the libations being served during the last hour on the first day the exhibition hall is open.

Sponsors for this Year’s RSA 2013 San Francisco

Global Diamond Sponsors – Microsoft, Symantec, and RSA.  Global Platinum Sponsors, Akamai, and Qualys, Global Gold Sponsors – FireEye, splunk, and SafeNet, Platinum Sponsors – Cisco, McAfee, HP, and TrustWave.  There are also Gold and Silver sponsor levels as well.  Visit their booths. Travel the perimeter to view products from companies who lack the budget of the larger companies, may just be starting out, but may also have great products.    

This is your chance to attend a talk by a smaller vendor, then go to a larger vendor and ask, “Can you do A, B, and C?  This smaller vendor can.”    Asking a larger vendor why their products didn’t test as well on the tests performed by  www.virusbtn.com , www.AV-Test.org   and www.AV-comparatives.org  will not get you to the front of the line for any booth giveaways.  At the show, you may be able to view products that range from not so hot, to avg,  to pretty incredible.

Award Events Not Affiliated with RSA But Being Held That Week

SC Magazine will be presenting their SC Awards 2013 Reader Trust, Excellence, and Professional Awards   at a dinner on February 26. There are  over 34 categories this year.  To see a list of some of the finalists, go to http://kensek.blogspot.com/2012/02/sc-magazine-awards-2012-winners_29.html

 

Info Security Products Guide will be presenting their 2013 Global Industry excellence awards at a dinner on February 27.  To see a list   of the finalists for this award, go to http://www.infosecurityproductsguide.com/excellence/index.html

 

For the recipients of either these awards - Bragging rights, Product and company recognition, Marketing and promotion opportunities, Logos for their web site.  With a fair degree of certainty,  rest assured that those who have won the previous year but not this year, will not quickly be removing their logos from the web.   sites.

Free Pass – RSA 2013 San Francisco

Entering FXE13AHN at the link below will get you a free RSA 2013 exhibition hall pass.  Stop by the Ahnlab booth, learn about APTs, and tell Ahnlab  thank you.  FX13SPH at the link below will get you a free RSA  2013 exhibition hall pass.  Stop by the Sophos booth and tell them thank you.  As will FXE13ZSC.  Stop by the Zscaler booth and tell them thank you. Expires February 22.

Register: https://ae.rsaconference.com/US13/portal/newreg.ww

AVG Technologies - IPO One Year Birthday. Growth Curve or Ski Slope for 2013? Forbes versus Seeking Alpha Contributors

AVG Technologies has now been public for a year.  Their IPO (Initial Public Offering) took place in early February, 2012,  The stock   closed around $13.08 on its opening day last February  on Nasdaq  after targeting an opening day price at $16 plus.   The stock closed  on February 2, 2013  at  $13.14.  These two figures represent a one-year return of 0.38% excluding transaction costs and any dividends paid.  For the first 9 months of their fiscal year, AVG Technologies  revenue was up, but net income was down (not good as a trend).   Over the course of the year, AVG had a low of $9.42 and in December, had a high of $16.38. They have toolbar  deals with both Google and Yahoo.

 A Motley Fool Perspective - February

One worries about the thoroughness of AVG's protection, however, when one sees they've not been very thorough in safeguarding their finances. Current ratio is a quick-and-easy indicator of a stock's health, especially for a smaller company such as AVG which may lack the resources to bail itself out in the long term. With a current ratio of 0.7, AVG is struggling.
But T.M., you might say, AVG could be using its profits to expand, research, etc. etc. Their declining margins,  however, tell another tale: one of a company whose long-term solvency and profitability is in doubt.

 http://beta.fool.com/tmloyd/2013/02/11/world-wide-web-investment-here-today-gone-tomorrow/23612/?ticker=AVG

So what do Forbes contributor Jim Oberweis and Seeking Alpha contributor Eiad Asbahi see for the company? 

3 Slow Growth Small-Caps with Big Potential – Forbes 

Forbes’ numbers are inaccurate in the article.  AVG Technologies has more than 110 million computer users.  While they have been losing share, according to Opswat, they claim an active user base of 143 million users.  Some of this is attributable to 25 million copies of their Internet Security Suite (the paid) product given to purchasers of Huawei (Yes, that Huawei) mobile devices, in India.  

Forbes contributor Jim Oberweis likes AVG for the company’s PEG ratio, growth prospects, and the fact that the free product received a PC Magazine Editor’s choice award.  He likes the Google relationship. See links at the bottom of this blog for relative rankings of the paid AVG Antivirus and AVG Internet Security  solutions. The print article will be in the February 11 issue.

 

http://www.forbes.com/sites/investor/2013/01/23/three-slow-growth-small-caps-with-big-potential/

AVG: Feb 1st Google Policy Updates Threaten AVG's Growth Engine, Signals Steep Downside

In a  January 31 Seeking Alpha article,  Seeking Alpha contributor Eiad Asbahi is forecasting a share price of $8.50 to $10 per share (elsewhere in the analysis, the figures are $7.30 to $10.28).  This is based on an extensive quantitative analysis based on a supposed change that will be occurring in Google’s toolbar policy.   

According to the article, “Google (GOOG), AVG's primary search partner and currently the source of substantially all of AVG's Platform-derived revenue, is on the verge of announcing an update to its toolbar policy, something that has not been widely followed or discussed by market participants.”  This would require companies to make use of “opt-out” instead of having “opt-in” checked automatically on the customer’s behalf.  Opt-in has been a point of consternation among many users of many software packages.

In the article, he mentions Yahoo CEO Marissa Mayer was asked about this policy change.  Her response,   "On the Toolbar change from Google, we'd be remiss to offer comment on another company's product, so I'm not going to comment further there.”  AVG Technologies has a toolbar  agreement with Yahoo as well as Google. Previously, they had been exclusively one company or the other.

Asbahi did some number crunching based on different churn rates for users prior to and after February 1, 2012, an opt-in rate of 65% and per user revenue from Yahoo search bar users at 50% of Google tool bar users.  After all of his number crunching,  his estimates for AVG Technologies 2013 revenue to be between $248M and $287M,  an “ implied market capitalization and target price would between $399M and $569M, or $7.34/share and $10.28/share respectively.” On CNETs download site, AVG averages around a million downloads a week, suggesting major churn.

From a November 1 Financial Times blog,  “J R Smith, chief executive of AVG, admits that being the first in the industry to offer free products has “kind of put us a little bit in a box”, but slowly the company is succeeding in convincing investors that AVG has evolved from offering just hardcore security into other services and platforms”  http://blogs.ft.com/beyond-brics/2012/11/01/corporate-watch-avg-breaks-out

AVG made a buy versus make decision regarding mobile security in November 2010 with a $4.1 million acquisition of Droidsecurity to gain entry into mobile security market. 

AVG Technologies should be reporting their earnings on February 21.    

    

For some comparative reviews of paid antivirus and internet security products by PC Magazine, go to:

http://kensek.blogspot.com/2012/09/best-antivirus-2013.html

http://kensek.blogspot.com/2012/09/best-internet-security-suites-2013-best.html

 

About OPSWAT www.opswat.com    

Founded in 2002, OPSWAT is the industry leader in software management SDKs, interoperability certification, and multiple-engine scanning solutions.

OPSWAT market share reports are available at http://www.opswat.com/media/reports    

AV-Comparatives Anti-virus Comparative Summary Report 2012, BitDefender Named Product of the Year

Test group AV-Comparatives has released their Anti-virus Comparative Summary Report 2012.  This quite thorough 180 page  report contains a summary of the winning products for the test they performed in 2012, and  also contains an extensive 150 plus page user interface review section.A great report to download.

On an overall basis, AV-Comparatives, gave eight company's products their Top Rated designation.  In alphabetical order, these were  Avast, Avira,  Bitdefender,  BullGuard, ESET, F-Secure, G DATA, and  Kaspersky. Congratulations to these companies! 

For the individual   tests, the 2012 report lists the Gold, Silver, and Bronze Medal recipients.   To view the Silver and Bronze recipients, you’ll have to download the free report. Below are the Gold Medal Recipients.

Gold Medal Recipients - Summary Report 2012

• Product of the Year – Bitdefender (G Data and Kaspersky, were awarded Bronze and Silver)
• File Detection – Avira
• Whole-Product “Real-World” Dynamic Protection - BitDefender (a nice interactive report)
• Proactive (Heuristic) Detection/Protection - A tie.  BitDefender and Kaspersky
• False Positive – Microsoft
• Overall Performance (Low System Impact) – Webroot
• Anti-Phishing Protection – BitDefender
• Malware Removal – A tie, BitDefender and Kaspersky

Congratulations to the Gold Medal recipients listed above and to the Silver and Bronze Medal Recipients listed in the 2012  report!

AC-comparatives encourages people trying to select a product to go to the vendor’s websites, download a trial version, and try products for themselves.  Many vendors have multiple flavors of internet security suites, each with their own spin on additional features.  Many offer multi-user and multi-year licenses.  One thing not to do.  Don’t chose based on how many Facebook Fans like the product.   

Symantec doesn’t appear in this report.  In order to be tested and reported on by AV-Comparatives, vendors have to agree to participate in all the tests.  Symantec chose not to do this.  Hence, they’re not listed in any of the tests. Steve Bennett.This could be the year.

The report also has a great  link that lets you select a year and view a one page report listing all vendors and how many stars they received for each test they were in. The most stars a vendor could receive on a single test was  three.  They could also receive two, one, and tested.  A perfect score for the year – twenty seven.  BitDefender received twenty six  in 2012.  

Freemium Vendors

The freemium vendors in the report were Avast, AVG Technologies, Avira, Panda, and PC Tools.  As mentioned above,  nine different tests with a potential total of twenty seven stars. 

• Avast – 22 stars
• Avira – 22 stars (yes, a tie)
• Panda - 19 stars
• AVG Technologies – 14 stars
• PC Tools – 13 stars

Avast and Avira received the same number of stars in seven of the nine tests and were both among the AV-Comparatives eight top products for 2012.   Avast wins the Czech crown for the year.  

About AV-comparatives     www.av-comparatives.org

AV-Comparatives is an Austrian Non-Profit-Organization.  They provide independent Antivirus software tests free to the public.  Go to their website to view all the great comparative reports and surveys they publish.  A great number of their reports are free.