Symantec made its fifth acquisition of the year on Tuesday, continuing a spate of consolidation in the IT security sector with a $695m deal to buy MessageLabs of the UK. 

MessageLabs, which has offices in Gloucester, uses a software-as-a-service model to deliver security for online chat, email and web applications. The company’s software allows customers to block malware, prevent access to certain web sites, and stop the unauthorised transfer of sensitive information. It claims to be the number one such company in the world, with more than 19,000 customers.

McAfee, one of Symantec’s leading rivals, scooped up a similar company, Secure Computing, for $465m last month. 

For Symantec,  the acquisition is an opportunity to extend its traditional security products into MessageLabs’s software-as-a-service model. From the press release:

By combining MessageLabs’ deep expertise in the SaaS market with Symantec’s rich portfolio of technologies, Symantec will be able to offer a broad portfolio of online service to secure and manage information. By bringing together two industry leaders, Symantec significantly expands its messaging security market leadership. In addition, Symantec will provide the broadest range of offerings in the messaging security market including software, appliance and hosted services.

“Symantec and MessageLabs have a common belief in the benefits of in-the-cloud services and how they enable customers to be protected from threats and enforce policy,” said Adrian Chamberlain, chief executive officer, MessageLabs. “MessageLabs’ services help ensure that only safe and appropriate information enters and leaves the organization. Together, with Symantec, we can set a roadmap for the future of online services.”

Downbeat news about the technology sector is getting to be a regular feature around here. Today’s instalment comes courtesy of Citigroup, which published a note this morning slashing its forecasts for PC shipment growth in 2009.

Citi’s IT hardware analysts expect PC shipments to grow just 5 per cent next year, down from a previous estimate of 10-12 per cent. They also trimmed their guidance for this year, to 13 per cent from 15 per cent.

The usual suspects - a slowing economy, currency fluctuations, job losses in the corporate sector and less disposable income  - are all expected to weigh on computer sales, according to Citi.

There was some good news, however. According to Citi’s modelling, most of the damange has already been priced into IT hardware stocks. Take Hewlett-Packard (chart above). Richard Waters wrote here a few days ago about IBM’s recent share price falls. Like IBM, HP has also been hit by the recent jitters in the stock market. Its shares are down more than 11 per cent in recent days, mirroring the fall in the broader S&P 500 index since late September.  

Citigroup now has HP trading on a multiple of 10 to 11 times forecast 2009 earnings - arguably a low number for a company that has shown, over the past three years under Mark Hurd, at least, that it is capable of wringing out costs and meeting earnings targets. 

Serious caveats remain. As we have mentioned earlier, no one yet knows just how big an impact the credit crisis will have on business activity. 

Blink and you’d have missed it. Apple’s shares briefly fell 10 per cent Friday morning after a CNN-owned website published a false report claiming that Steve Jobs had suffered a heart attack.

Apple quickly denied the report, which appeared on iReport.com, a CNN-owned website that allows citizen journalists to publish “unedited, unfiltered news.” Shares in the company later recovered to trade down just 3 per cent on the day. The SEC is investigating, according to CNN, which called the report “fraudulent.”

Since blogging and other forms of low-cost online publishing broke into the mainstream earlier this decade, investors have grown used to taking unsourced online reports with a grain of salt. But Friday’s incident underlined the risks faced by news outlets that are increasingly deciding to lend their imprimatur to such unfiltered content.

CNN has sought to distance itself from the rogue report, arguing that iReporter.com was set up as a community distinct from CNN itself, with guidelines that allow users to post material free from editorial control.

The guidelines may state that “CNN makes no guarantees about the content or the coverage on iReport.com,” but as Henry Blodget, the former Wall Street analyst turned tech blogger points out, iReport’s affiliation with CNN is inescapable, even to the most casual of web surfers. 

“CNN does not profess to be directly responsible for iReport, but its name is at the top of the site. It’s possible that reports like this will significantly damage CNN’s credibility, and we wouldn’t be surprised if this caused them to pull back from association with ‘citizen journalism,’” he says.  CNN later said it does not intend to make any changes to iReport. It said that any iReport content used on CNN itself was subject to thorough vetting.

Proponents of deeper integration of user-generated reports with traditional newsgathering argue that the trend is inevitable. “The audience really can generate content, that’s a fact of life,” says Marc Cooper, a professor of journalism at the University of Southern California. In such a world, news companies, investors and the general public all have a role to play in separating fact from fiction. As Dan Gillmor writes:

I don’t know too many details about CNN’s iReport internal systems, but I do know that CNN has been running this kind of risk for some time. The labeling of the site has never been, in my view, sufficiently careful to shout at readers that they should not take for granted that anything they see is necessarily true — or that readers who might make any kind of personal or financial decision based on what they see on the site are idiots.

But, he adds:

The shareholders who panicked are fools. Not the first time. Maybe when enough people get burned after believing things they should ignore, we’ll all recognize that we have to be skeptical of everything — but not equally skeptical of everything.

Tech bloggers are buzzing over Apple’s threat to shutter iTunes if three US judges side with music publishers and vote to raise royalty fees on digital downloads on Thursday.

You can read all about what the pending Copyright Royalty Board decision means for the online music industry here. In the meantime, here are three reasons that Apple’s threat - levelled in public testimony before the CRB last year - is likely nothing more than bluster:

1. Apple’s market power means it still has an advantage in pricing talks. In the world of digital music, Apple is king. With 85 per cent market share of paid digital downloads in the US, Apple may be able to force the music industry to absorb most, if not all, of any royalty increase. By driving a hard bargain, Apple should be able to minimise any impact to iTunes profits in the event that royalties go up.

2. Apple could appeal to a higher power to have an unfavourable CRB decision overruled. That’s what happened with internet radio after the CRB decided to raise royalties for webcasting last year. The decision was condemned by internet companies like Yahoo and AOL, who said the royalty hikes would damage the business model for internet radio. On Wednesday, Bloomberg reported that the US Congress had passed legislation that would let internet groups and music labels negotiate a lower rate - an interesting example of a royalty increase not sticking in the long run.

3. Apple has already begun to embrace variable pricing on the iTunes store. In recent months, Apple has moved to embrace variable pricing for television shows and other video content on iTunes - first with Time Warner’s shows from HBO, and now with NBC Universal. Steve Jobs would clearly prefer for iTunes to hold onto its 99 cents per song price model, but if all else fails, a move to variable pricing would not be without precedent. 

As an aside, astute readers will notice that whoever redacted the public copy of Eddy Cue’s testimony before the CRB last year didn’t do a very good job of blacking some of the secret bits out. Did you know that, at the time of Mr Cue’s testimony in early 2007,  iTunes had been growing at a rate of more than 1m users every other month since 2005?Or that about 40 per cent of the tracks sold on iTunes in early 2007 were sold as part of albums (implying that 60 per cent were sold one at a time - a low-margin proposition, given credit card fees, as Apple explains in its testimony)? Well, you do now!

It looks like Digg is getting serious about beating back some of the competition that has begun to crop up in the social news space. Yesterday, the company that pioneered the user-driven approach to news announced its third funding round, a $28.7bn $28.7m haul led by Highland Capital Partners of nearby Silicon Valley.

The move will double Digg’s coffers, allowing it to double its staff, move to a new headquarters, and expand overseas. Four years after its launch, Digg remains one of the most popular news sites on the web. But its vote-based method for deciding which stories to display on its pages has spread far and wide, with some big media names - most notably Yahoo, with its Yahoo Buzz site - getting in on the act.

The site claims 30m unique users per month, double that of one year ago. It said its advertising revenues had tripled over the same period, according to the news release that accompanied today’s fundraising news.

With well-funded competitors nipping at Digg’s heels, and with interest in the news spiking as the US presidential elections enter full swing, the extra infusion of cash looks well-timed.

When Steve Jobs strode onto the stage in San Francisco today to unveil Apple’s latest iPods, the Apple boss poked fun at recent speculation about his health by borrowing a line from Mark Twain.

“The reports of my death are greatly exaggeraged,” read a slide that flashed up on the screen as he began his hour-long spiel.

After the presentation Mr Jobs spoke briefly to CNBC, but only agreed to address his health in an off-camera interview:  

So after the interview, I did ask Jobs how he was doing. “I’m doing fine, really,” he said. I asked him about the rampant speculation and rumors on the blogosphere about the issue, and whether he was surprised by it. Where did he think it all came from, I asked. He picked up his briefcase and told me it was from “hedge funds with a big short position in Apple.”

He was kidding, right? Apparently, yes. CNBC explains:

I think a little context here might be helpful. He said it in passing. It wasn’t as if he was lobbing some specific grenade on Wall Street.

It is possible - probable, even -  that Apple’s latest iPhone software update was designed to address the bad reception and frequent dropped calls that have frustrated iPhone 3G customers over the past few weeks. But if so, Apple isn’t telling.

An Apple spokeswoman called me Tuesday morning to confirm what was already self-evident:  that yesterday afternoon, Apple had indeed launched an iPhone update. When asked for details, Apple would only say that the update was designed to “improve communication with 3G networks.”

Outside of this vague statement, Apple gave no details about the nature or extent of the problems the improvements were designed to address, or whether the fix had been effective. When asked for these details, the Apple spokeswoman read back the original statement verbatim.

Judging by comments around the blogosphere today, users remain frustrated. Take this comment on the New York Times’s Bits Blog:

“It would be nice if Jobs actually made some statement to help his customers out. We dont even know if this was supposed to be the fix, heck if we go by Apple we still wouldnt know there was a problem.”

Indeed.

Apple has remained characteristically tight-lipped about the reception problems with its much-hyped 3G iPhone. Indeed, it has yet to even acknowledge that a problem exists - a fact that has provoked frustrated responses from some users on Apple’s own support forums. Could that be about to change?

We hear that Apple is close to releasing a software upgrade designed to ‘fix’ the issues contibuting to dropped calls and poor 3G reception on iPhone handsets. Our industry sources tell us that Apple is expected to launch the new software within “the next few days.”

That would be an implicit acknowledgement that at least some of the user complaints about poor 3G performance are justified, although it remains unclear whether problems are truly widespread or whether they are affecting only a fraction of the millions of iPhones sold since the 3G handset launched last month.

Whatever the case, the whole affair highlights something engineers at rival companies like Research in Motion are fond of stating in connection with Google’s forthcoming Android software stack, as well as the iPhone:  People underestimate the complexity of mobile handsets, (cellphone) radio is not simple.

Bottom line for Apple fans: Don’t despair, help seems to be on the way. 

Update: And just like that, Apple has gone live with an iPhone software update designed to fix unspecified “bugs”. It remains to be seen if this is the update our sources were referring to. Apple still has not come out with any public statement about the extent of reception problems on the iPhone 3G, or what it is doing to fix them.