The tech IPO everyone's (not) talking about

Security vendor AVG Technologies may go public on Thursday


The tech and financial worlds are eagerly awaiting Facebook's expected filing this week for an initial public offering of shares, which reportedly could come by Wednesday.

But another well-known tech company is expected to go public one day later. And is anyone talking about that? No!

For good reason, to be honest. That's because AVG Technologies NV isn't exactly Facebook, in terms of its size or cultural significance (for good or bad). While Facebook's IPO is expected to raise up to $10 billion, AVG's is aiming for up to only $136 million. Which makes Facebook's IPO 73.5 times larger.

Still, nearly anyone who has spent time on the Internet is familiar with AVG through its line of security software for both personal and enterprise use. Many of you may have some AVG software guarding your computer right now. So here's some information about the company to which you are entrusting your computer security, and perhaps your personal and professional lives.

Founded in 1991 and based in the Netherlands (though most of its 800+ employees work in the Czech Republic), AVG makes a range of security and PC repair software, using the common "freemium" business model of offering free products or services and then trying to entice freemium customers to upgrade to a paid product or subscription service.

Which is a constant challenge, though AVG, which has 106 million active users, has had some success. Revenue per active user increased to $1.94 for the nine months ended last September 30, up from $1.63 in the nine months ended September 30, 2010.

Overall revenue grew to $217.2 million in 2010 from $113.8 million in 2008, with sales through the first nine months of 2011 coming in at $198.1 million. Net income also is moving in the right direction, to $67.2 million in 2010 from $33.1 million in 2008. Through the first nine months of 2011, AVG's profit was $104.8 million.

Which all sounds good, but AVG is in a highly competitive sector, battling:

* Other vendors with “freemium” pricing such as Avast!, Avira, PC Tools (acquired by Symantec), Carbonite and Dropbox

* Traditional vendors such as McAfee (acquired by Intel), Symantec and Trend Micro, as well as Eset, Kaspersky Labs, Panda Software, Sophos, Rising, Kingsoft, CheckPoint and F-Secure

* Large corporations such as Microsoft and Google that offer security products.

* Emerging cloud-based and SaaS data protection offered by companies such as Apple

AVG has handled the competition well, though it's too soon to tell how much cloud and SaaS services will hurt its business.

However, AVG faces a couple of big problems: First, its internal metrics are sketchy.

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