AVG boosts product, IPO vague

There has been no decision to list shares of AVG Technologies on either the Warsaw or any other bourse, AVG CEO and President J.R. Smith told The Prague Post Sept. 24.

"It's news to me," he said in response to reports by Reuters and the daily Hospodářské noviny that quoted unnamed sources. "The shareholders are always looking at options to get some liquidity. They weigh those decisions every day, but there has been no decision made by the shareholders or anyone else to list in Poland or Prague or anywhere else."

Reuters reported Sept. 15 that an initial public offering (IPO) could be worth between 400 million ($532 million/7.4 billion Kč) and 800 million euros and would be only from current shareholders, rather than new shares.

Smith said rumors of an IPO are constant about the company, because of its steady growth over the past couple years.

"We're a high-growth company," he said. "We've got investors like Intel, Enterprise and recently TA Associates, another big investment house. Once those guys are in, there's going to be an exit at some point in time; that's why they invest. As to whether we're listing in Warsaw this year, it's news to me."

TA Associates, a growth private equity firm, invested $200 million in a minority stake in AVG in October of last year. The equity firm joined Enterprise Investors, Benson Oak Capital and Intel Capital as shareowners in AVG.

A partner at Enterprise Investors, a Polish firm, would not comment on the reports of an IPO.

New model

The company released an upgraded version of its popular anti-virus protection, AVG 2011, based on the freeware model that offers the software for free download, with the possibility to upgrade to a paid version. As before, the free version will still have the best features, Smith said.

The new version works three times as fast as the previous one, he said, and has a newly added feature that currently works with Facebook and LinkedIn, and will soon add additional social networking sites. Those sites are expected to have 1 billion users by 2012, and with higher use are also facing higher threats from malware and scams.

"We're working with Facebook on a lot of the threats and other things we see out there from our users. We've seen there's about 20,000 infected pages on these sites," he said; 11,000 of those are on Facebook.

The new version allows users to see if links posted on their pages are infected or not, and displays the threat level of any link they themselves post, a demarcation that's even visible to users without the software. Additionally, the upgraded software has a detection rate of 100 percent in some studies, he added, making it "the best detection rate in the industry."

"The AVG 9 has already had the best detection rate in the industry in the past six months. With [AVG 2011] we have hands down the best detection rate."

The free model, an idea pioneered by AVG in its 10th year, has allowed AVG to amass a huge user base that helps them improve the detection rate. Users provide feedback and report when threats are detected, sending AVG 1.5 billion pieces of information per day, 100 million of which are actual threats. Smith calls the model "people-powered protection," a system that allows AVG to partner with other companies to share trends and evolving threats, and gets its success from its high number of free users.

"We don't know who you are or what you're doing," he said of the information AVG collects this way. "The more people that use our products, the more information we have, and the better we can see and ... protect and help others protect."

AVG makes profits on users who upgrade to the paid version, often businesses that need additional customer support. But cooperating with companies to share the information about threats they gather from users has proven another way to boost revenue.

"We also take that data and provide it to lots of companies. The Microsofts, the Ciscos of the world, they use that information to better protect their own user bases. They've got their own hardware, software and firewalls, but they can use this information to help protect users of their own products," he said.

Claire Compton can be reached at
ccompton@praguepost.com