Trend Micro Inc., the world's third-largest anti-virus software maker, said on Friday computer virus attacks cost global businesses an estimated $55 billion in damages in 2003, a sum that would rise this year.

More than 80 per cent of the computers in China have been hit by computer virus by June 2003. [newsphoto.com.cn]

Companies lost roughly $20 billion to $30 billion in 2002 from the virus attacks, up from about $13 billion in 2001, according to various industry estimates.

"The economic and financial impact of virus attacks will continue to climb in 2004," Lionel Phang, Trend Micro's Managing Director told Reuters in an interview. He did not have a forecast for the year.

Spam threats and network viruses will likely become more prevalent in 2004, he said.

"The spam threat will increase exponentially, and will become the hideouts for viruses and hacking programs trying to gain an entry into the network," he added.

"Blended threats also will remain the standard way to attack networks, where one virus file will create four to five different activities within the system."

Phang offered the following example of a blended threat: a spam-generating virus causes a surge in the company's network traffic and prompts its network administrators to block the junk email, and while technicians try to fix the spam problem the virus drops a program into the system that monitors keystrokes and steals company passwords and user IDs.

Viruses can gain entry into computer networks via instant messaging channels, such as Internet Relay Chat (IRC) programs and Time Warner Inc.'s ICQ service, Phang added.

Natasha David, an analyst with International Data Corp (IDC), said spam would emerge as the key transmission vehicle for viruses in 2004.

"Spammers are going to put viruses and worms in email attachments, so (junk email) will become more than just a nuisance," she said.

According to IDC, the global market for secure content management, which includes anti-virus solutions, message security and web filtering, is expected to hit $6.4 billion in 2007, representing a compound annual growth rate of 19 percent.

One attack every month

Last year, there was almost one major virus attack every month, including the well-known Slammer worm, which shut down Internet service providers in South Korea (news - web sites), disrupted plane schedules and knocked out automatic teller machines in January.

The Lovegate Internet email worm surfaced in February, while the Bugbear and SoBig viruses, which spread via infected emails, appeared in June.

Analysts said the number of attacks between January and June 2003 exceeded 70,000, which is about twice the rate for 2002.

"About 20 to 40 new and variant virus threats were reported to Trend Micro on a daily basis worldwide in 2003," Phang said.

The company plans to focus on products and services for the small and medium businesses this year.

"This is the most vulnerable market segment in 2004 as their awareness level is really low, they do not have the dedicated IT expertise, and have a false sense of security about virus attacks, thinking they are too small a target for such attacks," Phang said.

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