Taking its first meaningful step in fighting one of computing's most villainous scourges, Microsoft said yesterday it has bought a New York-based anti-spyware company and will...

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Taking its first meaningful step in fighting one of computing’s most villainous scourges, Microsoft said yesterday it has bought a New York-based anti-spyware company and will release a test version of a spyware killer within a month.

The announcement is an admission from Microsoft that even though it says security is its top priority, it hasn’t done enough to protect customers from what has become one of the top security complaints of computer users.

Spyware comes in many forms, from pop-up advertisements to programs that secretly record keystrokes, and is so sneaky that users often don’t know their computers are infected with it. It can overwhelm computers, slowing them to the point that they become unusable.

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Microsoft said it is buying Giant Company Software, one of the more well-known vendors of anti-spyware products, but would not disclose the financial terms of the deal. Giant products include Spam Inspector, Popup Inspector and Giant AntiSpyware. It has 10 employees, at least some of whom will relocate to Microsoft’s Redmond campus.

The announcement raised concerns within the security industry that Microsoft would soon enter the anti-virus market. Last year, Microsoft bought the assets of GeCAD Software, a Romanian anti-virus company, but it has not begun competing in the industry with its own products.

The Giant acquisition “is good for Microsoft, but it’s bad for a lot of the boutique niche-technology companies that are going to watch their business opportunities erode,” said John Watters, chief executive of iDefense, a Reston, Va.-based company that provides security intelligence to businesses and governments.

Microsoft will offer a free beta, or test, version of its spyware-fighting software within a month, said Gordon Mangione, a corporate vice president in the company’s security division. The company hasn’t ruled out charging for the final version, he said, and will likely base that decision on feedback from customers.

“We’ll think about what it means to get into some of those areas,” he said. Much of the anti-spyware software in use today is offered free or for a small charge.

Microsoft never embarks on anything without an offensive plan, but it was also on the defensive with its customers when it came to spyware, said Jon Oltsik, a senior analyst at Enterprise Strategy Group, a technology-research company in Milford, Mass.

“Anything that stops Windows from working and makes people throw a shoe at a Windows computer is not good for Microsoft,” he said. But the company also could use security as a way to make money, he added.

“It wouldn’t surprise me at all to either use spyware or Internet security in general as a product to sell or as a bundled solution to the operating system to get people to upgrade,” he said.

Microsoft began its push into fighting spyware this year with the release of an upgrade to the Windows XP operating system called Service Pack 2, Mangione said. That upgrade featured a blocker to stop Web pop-ups, which are one conduit for spyware delivery.

Mangione said Microsoft was particularly interested in two aspects of Giant. One was its online community, where users could submit examples of spyware and discuss how they were affected by it. The second was Giant’s system of analyzing how spyware gets onto machines and relaying that information back to users.

There are plenty of anti-spyware products available, including the free Spybot Search & Destroy and McAfee’s AntiSpyware. It’s unclear how many users are installing them, however, said Jim Hurley, a vice president of research at the Aberdeen Group.

“I’m guessing Microsoft would not have done the acquisition unless they believed their customers really needed it,” he said.

Kim Peterson: 206-464-2360 or kpeterson@seattletimes.com