Microsoft Corp. has bought into the anti-spyware business.

Just two months after Chairman Bill Gates dropped a strong hint that Microsoft planned to do something about the spyware scourge, the Redmond, Wash., company announced the acquisition of Giant Company Software, a New York-based startup with a highly rated anti-spyware application.

Financial terms of the purchase were not released.

Will spyware become an even bigger headache than viruses? Find out here.

Within the next month, Microsoft plans to roll out an anti-spyware protection beta for Windows customers. The company said the spyware detection and removal application will work alongside the security technologies in Windows XP Service Pack 2.

It will be launched as a free tool for Windows 2000 and later versions only.

The beta will offer a scanning tool to locate and remove spyware and other deceptive software threats. It will also be configurable to block known spyware and other unwanted software, Microsoft said.

Before the acquisition, Giant Company's anti-spyware application was sold for $29.95, with free upgrades and updates for one year. The company also marketed tools for spam and pop-up detection.

During a recent test by renowned spyware researcher Eric Howes, the Giant detection and removal tool rated the best among the 20 applications tested, even though there were criticisms that it missed several "critical" files and registry entries.

For more on the spyware tests, click here.

Despite those shortcomings, Howes believes Microsoft made an "excellent decision" to buy Giant to power its anti-spyware move.

"Microsoft made an excellent purchase here. Giant has a very well-done product. I tested all the major tools back in October, and Giant came out on top," Howes told eWEEK.com.

"It's a very young application, and they have to bolt some things down here and there. But, in general, it's an excellent application," Howes added.

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