Microsoft by midyear plans to release a test version of a new Internet Explorer browser that better protects users from scams and malicious code while surfing the Web, the company announced Tuesday.

Additionally, responding to a surge over the past year in online scams involving spyware, Microsoft has decided not to charge for its anti-spyware product, Chairman and Chief Software Architect Bill Gates said in a keynote address at the RSA Conference 2005 in San Francisco.

"We have looked hard at the nature of this problem and have made the decision that this anti-spyware product will be available at no additional cost to Windows users," Gates said. "I am very excited that we have this technology and it really addresses a burning need for our users."

Microsoft bought anti-spyware software maker Giant Company Software in December and released a beta of Windows AntiSpyware in January. Until Tuesday's announcement the company had not said whether it would sell the product or give it away. Other companies, including traditional anti-virus vendors, offer anti-spyware products.

In addition to its free consumer product, Microsoft will offer a for-pay anti-spyware product for corporate users that will support enterprise needs for management and deployment, said Amy Roberts, a director in Microsoft's Security Business and Technology Unit. Roberts would not say when the enterprise anti-spyware product will be available.

A second beta version of the consumer Windows AntiSpyware product is scheduled to be available in the first half of this year, Roberts said in an interview after Gates' keynote.

With the increasing phishing threats and perhaps competitive pressure, Microsoft has changed its plans for IE. Previously the company's plans called for a new version of the ubiquitous browser to be included in the next version of Windows, code-named Longhorn, due in 2006.

"We have decided to do a new version of Internet Explorer," Gates said. The new IE 7 will "add new levels of security," he said. A first beta is due in mid-2005.

While scant on details for IE 7, Gates said the security enhancements will protect customers against phishing and other malware. The features will also be included in the version of IE for Longhorn. IE 7 will be for users of Windows XP with Service Pack 2. Roberts could not say when the final version of IE 7 would be available.

The IDG News Service is a Network World affiliate.