AV-Comparatives File Detection Test of Malicious Software - March 2013

Test group AV-Comparatives has released their March 2013 File Detection of Malicious Software report.  Ten pages of nice reading.  The three star performers, in order, were Avira, F-Secure, BitDefender, BullGuard, and Kaspersky.  Congratulations to these five vendors for their performance!  G Data had the top detection rate, 99.9% but suffered in their overall performance due to false positives.  ESET finished 17^th in detection rate, which may have precipitated  their drop in the standings.  The only free product in the test was from Panda. 

There was some movement from the av-comparatives 2012 summary report.  The companies receiving Top Rated designation were,  in alphabetical order - Avast, Avira, Bitdefender, BullGuard, ESET, F-Secure, G DATA, and Kaspersky.  

The company with products in the yellow box, otherwise known as Symantec, was included in this report.  This was the first time in a long while.  Suffice it to say, Symantec has nowhere to go but up, finishing in the “tested” (not even one star) category.  They had the lowest detection rate of all products tested.  Shout out to CEO Steve Bennett; that is okay.  Next test. Eva, get those engineers out of the cloud and working on the engine and file detection ;)

What this report is showing is that the products with the most name brand recognition are not always the top performers.  Trend Micro only received one star, and McAfee two stars.  Average these scores with Symantec and you get one star out of three.  Ouch.  For the complete report, you will have to go to the www.av-comparatives.org  web site. 

Tests such as these are much more valuable than  looking at  “likes” on a company web site. People should look at the av-test and Virus Bulletin web site.  PC Magazine does extensive testing, as well.  Put something on your device.  You don’t have to install a toolbar to get a price break.  Look, also, for installing (in addition) one of the free products that helps protect you while surfing the web.  McAfee, Zone Labs, Blue Coat, are among the vendors providing these.  You may want to install an internet security product for more comprehensive protection than that provided by an antivirus product.

  

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.

AV-Comparatives IT Security Survey 2013

AV-Comparatives released their IT Security Survey 2013.  It’s an interesting read for those following consumer antivirus and internet security providers.  Consumer AV and Internet Security providers may want to use some of the results to help them work on their next release instead of feature creep.  I’m going to mention some of the highlights but people really need to download the report

Market Share  

First – congratulations to the market share leaders in each portion of the world.

• Europe – Avast
• North America – Microsoft 
• Asia - Kaspersky
• South/Central America – Avast

In the global battle of the three A’s, the order was the same in every section of the world – (1) Avast (2) Avira (3) AVG Technologies.  Avast finished no lower than third in any section of the world, and Avira no lower than fifth.  AVG Technologies finished eight, eight, eight,  and seventh.  Therefore, Avast wins the Czech crown as well.

With the exception of Symantec finishing in second in North America, neither they nor McAfee fared very well in the market share report portion of the survey. People may want to look at this portion of the report with the market share reports from OPSWAT.

Kaspersky, who has their eyes on overtaking Trend Micro in the overall revenue race, topped Trend Micro in all regions of the world, including finishing first in Trend’s home turf in Asia.  That has to be a major ouch for Trend Micro.  You don’t lose in your own house. 

Testing

The top tests respondents were interested  in were  Malware Detection (83%) followed by “Real World” protection (64%).  Respondents got to pick four.  Engine developers - you now know your priorities.

Confidence in Test Labs

On a scale of 1 to 5, only three labs scored over four with the respondents, AV-Comparatives, Virus Bulleting, and AV-Test.  TopTenReviews was the only lab to score under 2.  Folks, you can remove that link as one of your favorites if you have it there.  People were only to rate labs that they were aware of. 

Confidence in Magazine Reviews

No publication scored over 3.5 on this.  The top 4.  CNET, PC World, Computerworld, and PC Magazine all scored over  3.3, a narrow band. 

What’s Important to You in a Security Product?

The top three, with none over 65% - Good detection rate (without having to be online), good malware removal, low impact on system performance (the gamers speak).  These results may not speak well for pure cloud solutions.  The bottom two – many customizable features (15%), and well –known product/software vendor (5.6%).  Symantec, McAfee, Trend Micro – take a look at your branding budget.  Those billboards on 101 in Silicon Valley may not be doing much for you ;).  People were to pick five out of fifteen.

What Does this Mean for the Vendors? 

Vendors - Detection rate!  Malware removal/cleaning!  Performance!  Nowhere in the survey did users ask for more features.  Customizability scored low.   You may want to rethink adding additional features to your antivirus or internet security product. I’d curtail  the development of the second, third, or fourth internet security suite.

Reduce/remove unnecessary gimmicks from the products (toolbars, registry cleaners, etc) which do not strictly belong on a security product scored six out of fifteen.  Hey, vendors with toolbar (?) checked yes, and/or make removable difficult.  A chance to earn some customer points.  Wait, a second, you revenue share with other vendors such as Google or Yahoo on the toolbar.  Never mind.

So how does   the above correlate to how well a product catches malware?

Another good read is AV-Comparatives Summary Report 2012, issued in December.  The top product – Bitdefender.  Gang, check it out.  The top rated products in alphabetical order were from Avast, Avira, BitDefender, BullGuard, ESET, F-Secure, G Data, and Kaspersky.  Some names for you folks to check out when your subscription is up for renewal or take advantage of a store’s “Free with competitive upgrade!” offer.  You may want to listen to your Facebook friends when it comes down to where to eat.  Unlike when it comes to what antivirus or internet security software to buy.  Trust no one owning a brass monkey. 

Download both reports.  They’re great reading.

About AV-Comparatives   www.av-comparatives.org  

AV-Comparatives is an Austrian Non-Profit-Organization.  They provide independent Anti-Virus software tests free to the public.  Go to the AV-comparatives website for complete details about the organization, the many tests they perform, and to download copies of test reports. 

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.

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