UPDATE 2-Symantec anti-virus update makes some PCs inoperable

* Symantec not sure what caused the problem

* Says only affects Windows XP machines

* Customer says Symantec offering compensation

By Jim Finkle

BOSTON, July 13 (Reuters) - A bug in an update of Symantec Corp's anti-virus software caused some Windows PCs to crash late this week, making machines inoperable until they were serviced in an embarrassing episode that angered some customers.

The company disclosed the problem on its website, saying that an update to its widely used Symantec Endpoint Protection 12.1 and Norton anti-virus software for businesses caused some PCs running Microsoft Windows XP software to crash repeatedly, showing what is known as the "blue screen of death."

The embarrassment comes at a challenging time for Symantec, whose shares have lost about a quarter of their value since it warned of a pending profit decline three months ago.

"Enterprise security has continued to be an uphill battle for Symantec," said Daniel Ives, an analyst with FBR Capital Markets. "There is increasing competition. The company historically has not been consistent around executing."

The company knows so far of about 300 corporate customers that have been affected, and about 60 consumer customers.

Customers reported it took Symantec hours to identify and fix the bug and that they needed to fix computers broken by the tainted update on their own.

Symantec blamed the glitch on software compatibility issues that arose after an update was released late on Wednesday. PCs could be fixed if customers manually removed the software from each disabled computer, it said in an advisory.

"Phoning Symantec support this morning was the start of the hell we went through," one customer said in a support forum on Symantec's website.

"The support is a joke, the quality control is a joke, and the software is not much better."

COMPENSATE ME

Customers complained on a Symantec user forum that the removal process was time consuming, although one said the software maker had offered compensation for the inconvenience.

That customer said on the support site that he emailed technical support to ask: "How is Symantec going to compensate customers for the hours of lost worker production and the time and effort taken by IT staffs to rectify this huge error by Symantec?"

He said a company representative called him 20 minutes later to say they were working on a compensation package.

"I encourage everyone to ask to be compensated for the time and effort it took all of us (to) fix Symantec's software," the customer said on the support site. ()

Symantec spokeswoman Ellen Hayes did not respond when asked if any compensation that might be in the works.

A technology manager with Dutch company PSO Beheer BV told Reuters the bug caused some 150 PCs to fail. His company had to close a laboratory with equipment running on Windows XP machines and also sent some workers home so they could access their network remotely.

"It did have quite an impact on our business," said manager Ron van den Broek. "My first impression is Symantec is downplaying the effects of this issue."

A Maryland-based insurance company temporarily shut down anti-virus software for all its 150 PCs to prevent them from getting damaged, leaving them without protection, the company's technology manager told Reuters.