Security software firm Trend Micro today announced it had completed a deal with Microsoft to provide virus scanning, protection and cleaning for its Hotmail Web-based e-mail service.

Under the agreement, the Tokyo-based anti-virus and security software company will provide Hotmail's 187 million users with protection whenever they send and receive e-mail attachments. The software will scan in real-time for the latest viruses, Trojans and worms, according to Punit Minocha, senior director of business development at Trend Micro.

"This is the same virus protection technology that has protected users around the world for a number of years," he said.

The company's anti-virus scanning engine will run on Hotmail servers, linking to virus definition update servers, Minocha said.

Trend Micro, a major player in the computer security markets of Asia, makes numerous desktop antivirus and content security products, including firewall, anti-spam and content filtering products.

"MSN is focused on providing a safer online experience for consumers, and we continue to make investments in this area. We're pleased to work with Trend Micro, with its deep antivirus expertise, to expand the email protection of our Hotmail customers," said Phil Holden, director of MSN Communication Services at Microsoft, in a statement.

The move by Redmond was seen in some corners as a blow to Santa Clara-based security firm McAfee , a Trend Micro competitor, who had provided the bulk of virus security to Hotmail users since 2000. However, Microsoft officials announced McAfee will continue to handle virus protection services for its 9 million premium Hotmail members.

Minocha, who said Trend Micro has long been been a mainstay in both the enterprise and personal PC security markets of Japan, expects the new relationship to increase the company's profile in the lucrative North American market.

"We do have a large consumer presence in Japan but have taken a back seat in North America," he said. "This is a really big deal for us," he added.

And Wall Street seems to agree.

The move has had nearly polar effects on both software security vendors' stock prices. As news of the agreement reached the street Monday, Trend Micro soared as much as 14 percent, or $5.39, to $55.87. While McAfee saw its share price fall more than 8 percent, or $ 2.25, to $26.70.

Financial terms of the agreement were not disclosed.