Security Firms Wait For Microsoft's Move; Invoking The "M' Word; Digital River says sales may plummet, but other firms are less concerned.(INTERNET & TECHNOLOGY)

Byline: DONNA HOWELL

The question is just how much splash an 800-pound gorilla will make, since it's headed straight for the middle of the pool.

Anticipation of Microsoft's foray deeper into tech security is already causing ripples in that industry. It has jostled stock prices and company outlooks, though views differ as to how big a threat Microsoft really presents in the tech security field.

Microsoft didn't talk about its security plans in its quarterly earnings announcement Thursday. But one day earlier Digital River, which runs online stores for security firms and software makers, did.

The company used the "M" word and "the big unknown" to explain why its own growth rate might drop by more than half in 2006. Digital River's stock then fell several dollars. Shares of security firms Symantec and McAfee also flinched.

Digital River forecast 16% revenue growth in 2006, "which is a little conservative given our history," said Digital River Chief Executive Joel Ronning. The company expects its sales this year will rise 40% from last year, while 2004 sales rose 52%.

Why the lower outlook? "The primary reason is that we have a large presence in the anti-virus market and we're seeing Microsoft coming in with a product next year," Ronning said.