The new service is currently code-named Morro, apparently after the Morro de Sao Paolo beach area in Brazil. Observers are expecting the free service to compete directly with McAfee and Symantec, two of the leading companies in this field.

A Microsoft spokesperson told news media that the software giant is currently internally testing the new software among its employees, and then it will offer a public beta at some unspecified point in 2009. The software is expected to be available for computers running Windows Vista, XP, and the upcoming Windows 7.

'Basic Anti-Malware Software'

Microsoft had previously launched security services with Live OneCare, for which retail sales will be discontinued by the end of this month, although support will continue to the end of current subscriptions. All OneCare sales, including those online, are expected to be phased out as Morro ramps up.

It is expected that Morro will only be available via online download, not as part of Windows 7.

Peter Firstbrook, an analyst with industry research firm Gartner, described Morro as "basic anti-malware software," using the OneCare engine. These days, he said, "signature-based anti-virus software is basically a commodity," and, with no price, Morro is likely to "get a really good reception."

"Microsoft originally got into anti-viral protection," he added, "because they felt that Symantec and McAfee weren't really getting enough penetration, people's machines were getting infected, and it was impacting the Microsoft experience."

'Bigger Target'

If Morro provides good protection, he said, it could "provide a significant value for users." He added that, from Microsoft's perspective, free anti-viral software improves user experience with Microsoft-based products and, because the company will receive feedback in the form of data from users, it will help them to improve their charged-for enterprise products.

Laura DiDio, an analyst with Information Technology Intelligence Corp., said that Microsoft has been "beaten up about its security." Initially, she said, some of those criticisms were justified, because the company paid less attention to security needs for PCs than it does now.

"It's not so much that Microsoft products are inherently more insecure," she said, "but if you're the world's biggest software company, you're a bigger target" and there are more attacks against you. DiDio noted that Microsoft has what she called a "huge department" devoted to security, and that a free version of Morro could show that they are "being responsible" about security.

DiDio added that she expected consumers and businesses to at least give Morro a look. In 2009, she said, "when you say something is from Microsoft, is free, and is about security, it deserves a look."