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CyberDefender Issues Open Letter to Stockholders

LOS ANGELES, April 14, 2011 (GLOBE NEWSWIRE) -- CyberDefender Corporation (Nasdaq:CYDE), a leading provider of remote technical support services and Internet security software and utilities, today announced that Chairman and Chief Executive Officer Gary Guseinov issued the following letter to stockholders:
/ Source: GlobeNewswire

LOS ANGELES, April 14, 2011 (GLOBE NEWSWIRE) -- CyberDefender Corporation (Nasdaq:CYDE), a leading provider of remote technical support services and Internet security software and utilities, today announced that Chairman and Chief Executive Officer Gary Guseinov issued the following letter to stockholders:

To Our Fellow Stockholders,

2010 marked an important year of strategic, financial and operational growth. Today we are a much different company than we were one year ago. As a growing company, we remain agile enough to evolve our business in a manner that can readily address market demand and capitalize on the opportunity. That is exactly what we have done, and we what will continue to do.

During the past few years we realized that many computer problems, including the ones caused by Malware, could not be resolved with software alone or in-store and on-site support services, which come with their own set of limitations. We rapidly identified the gap between software security and technical support services to both improve computer optimization and security, and to eliminate catastrophic data loss and stress plaguing millions of digitally dependent consumers. A short 18 months ago, we introduced LiveTech, our cost effective remote computer repair and personalized technical support service. We are now a leading provider of remote technical support services with LiveTech accounting for 60% of our record annual revenues in 2010, supported by our steady security software and PC utilities business.

As one of the only security-focused companies with a concentration on remote technical support services, we hold a tremendous market advantage with the opportunity to address the technical assistance needs of anyone who owns a computer. Through increasing awareness of our MyCleanPC, MaxMySpeed and DoubleMySpeed brands, we reach millions of potential customers per month and approximately 600,000 users download our software on a monthly basis. We also have well over 100,000 LiveTech subscribers and believe we have only scratched the surface of this broad and rapidly growing audience.

Comprehensive Solutions Model

Advancements in and the prevalence of technology have created a need for human assistance to set up security software, connect and synchronize a myriad of devices and optimize the functionality of each device. However, most companies that provide computer and mobile security are actually hardware or software companies, not service providers. CyberDefender is both. This is where we make our greatest impact.  

Our LiveTech business is stronger than ever with approximately 60% of our customers purchasing multi-year subscriptions. Our 2010 total GAAP revenues of $45.6 million were up 142% from 2009. We have now achieved 11 consecutive quarters of sequential growth while closing 2010 with record deferred revenue of $15.5 million.

Software is only as good as the user's ability to install and utilize it properly. Many consumers simply don't have the technical aptitude to fully understand their software, and frankly, they shouldn't have to – we have techs for that.

Addressing the Growing Market Opportunity

LiveTech remains central to our growth. According to Parks Associates, the market for premium support for the digital home will grow from $2.8 billion domestically in 2010 to $5.8 billion by 2014. To better address this market, during the year we made strategic investments in our infrastructure including the opening of our 200+ seat call center that can support over 600 skilled technicians and sales agents, and in December 2010, we implemented advanced SaaS CRM/IVR platforms to support our growing business. In 2010 we nearly tripled our gross sales renewals to $6.5 million from $2.3 million in 2009.  Since implementing our new SaaS systems, this number is growing and our sales goals for 2011 include securing in excess of 200,000 new LiveTech subscriptions. We are recognizing gains in customer satisfaction, which are translating to increased reactivation, as well as multi-year subscriptions that provide us with accelerating top line growth, additional visibility and recurring, predictable revenue.  

Today we have over 8.6 million active users on our cloud-based collaborative Internet security network and more than 800,000 paying subscribers. Many of our software customers call in to us providing a natural entry point for (1) a positive experience, which results in continued use of our service as other technical support needs arise (2) a cross selling opportunity for our subscription-based software, and/or (3) a subscription to our LiveTech service. This unique approach that combines sales and service has helped us drive an improvement in average revenue per order from $80 in the fourth quarter of 2009 to $140 in the fourth quarter of 2010.

We continue to introduce new security software and most recently added our cloud-based online backup storage product, which carries an estimated market of 1.2 million subscribers in 2010 and is expected to grow to 2.6 million subscribers by the end of 2014, according to Parks Associates. In adding online backup to our mix of software and services, we believe this $9.95+ per month addition will be a significant contributor to increasing our revenue per order among our existing subscriber base in addition to revenue opportunities from potential new customers. 

Growth Strategies

With this combination of direct-to-consumer remote technical support services and a specialized suite of security software, we expect to continue to capture additional revenue, and with largely fixed costs, as we scale our business and recognize deferred revenue, these gains are beginning to translate directly to our bottom line. In 2011, our strategic focus will be primarily on:

  • Expanding our domestic market share. Our primary near-term focus is on growing our US market share where there remains substantial opportunity to accelerate our business. Our US customer acquisition costs are low, there is limited competition, high barriers to entry and our security solutions are made to be simple and suitable for everyone who owns a computer.
  • Leveraging and scaling our marketing efforts through our strategic partnership with Guthy-Renker affiliate GR Match, LLC (GRM). DRTV and radio provide an exceptional opportunity, as competition in this advertising channel is scarce, providing us with a clear pathway to dominate in our category.
  • Introducing new proprietary software that complements our LiveTech service offering. Our pipeline for the remainder of 2011 includes a new version of our comprehensive Internet Security Suite and a comprehensive PC Optimization Suite for both advanced users and beginners to increase our revenue per user.
  • Introducing LiveTech services to the SMB market. During the second half of the year, and as additional capital becomes available to fund this initiative, we plan to introduce our products to the SMB market, which is a natural fit for our offering.

In the near term our focus remains on our domestic initiatives where we have gained significant traction and can accelerate our progress during the remainder of 2011. Longer term, we see expansion opportunities internationally as well as within the retail market, both of which provide attractive pathways for additional growth.

Looking Ahead

Given our technological evolution, consumers and small business owners are practically wholly dependent on technology. Today, your computer going down is the emotional equivalent of what losing your wallet or keys used to be, a sense of paralysis. Consumers and small businesses are recognizing their increasing need for security in the same manner that enterprises have embraced the need to protect and backup their critical data. As the consumer's first and last line of defense, our security and storage management system with a personal on call technician, is well positioned to thrive. 

We believe that managed support services will be a key driver for future growth, weighted heavily toward remote repair services. We have claimed our initial stake in the rich and growing live technical support services and security software market, and we are rapidly expanding our reach. With this in mind, we are projecting that in 2011 we can achieve in excess of $100 million in revenue and positive operating cash flow and as we scale our business, our path to profitability is clear.

We are confident in our future growth potential as we execute on our strategic initiatives to grow our business. Our leadership team is equally excited about our prospects and has already begun participating in buying opportunities through open market purchases during our available buying window in April.  We will continue to work to build-out our unique offering to further our company's brand equity and increase shareholder value. Thank you for your continued support.


About CyberDefender

CyberDefender is a leading provider of remote technical support services as well as Internet security software and utilities. With 8.6 million active users on its cloud-based collaborative Internet security network and more than 800,000 subscribers, CyberDefender protects its customers from the rapidly growing number of online threats through its suite of security and optimization software as well as its LiveTech subscription-based remote PC repair service. CyberDefender's team of more than 500 highly trained technicians and sales agents provide customers with efficient, round the clock remote PC repair services. The company develops and markets antispyware/antivirus software, PC optimization software, online backup and identity protection services. By combining remote live technical support and the aforementioned software products, CyberDefender offers a complete Internet security solution to consumers and small businesses.

CyberDefender directly markets its products and services to consumers through television and radio via its MyCleanPC, MaxMySpeed and DoubleMySpeed brands.CyberDefender products are fully compatible with Microsoft Windows® XP, Vista®, and 7 Operating systems. All products are available at Investor relations information is available at .

The CyberDefender Corporation logo is available at

Forward Looking Statements

Statements in this public announcement that are not statements of historical or current fact, including any statement regarding future growth and profitability, and future revenue targets, constitute "forward-looking statements" under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward looking statements include statements regarding: the Company's anticipation of generating positive cash flows from operations for fiscal year 2011; the Company's financial and business performance in fiscal year 2011; the expected growth of the LiveTech business and the expansion of the Company's product portfolio and sales channels; expected improvements in sales conversion and customer satisfaction; and expected increases in renewal subscriptions and expected decreases in subscriber churn. The forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause CyberDefender's actual results to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Factors that could cause CyberDefender's results to be materially different from the forward-looking statements include whether CyberDefender will be able to find financing as required and whether CyberDefender's revenues eventually will exceed its expenses. The forward-looking statements also are subject generally to other risks and uncertainties that are described from time to time in CyberDefender's reports and registration statements filed with the Securities and Exchange Commission, which are available for review at .

CONTACT: Public Relations: The Bohle Company Luis Levy (310) 785-0515 ext. 204 Investor Relations: The Piacente Group Brandi Floberg or Lee Roth (212) 481-2050 IR Site: