As more security and infrastructure companies have

paired up in recent months, it's worth another look at the deal that jump-started the trend: the $10 billion-plus merger between security behemoth

Symantec

(SYMC) - Get Report

and storage provider

Veritas

.

Have investors benefited from the marriage?

Looking at Symantec's stock price, the answer would seem to be a resounding no.

When the deal was first announced in December 2004, Symantec shares were trading at $25.13, and they've essentially trended lower ever since, as investors' fears about a problematic integration came to fruition.

"Definitely, the integration of the two companies was tougher than expected, and the markets themselves have been more difficult than expected," says Rich Parower, a portfolio manager at J. & W. Seligman, which holds Symantec shares. "The strategic vision was a little bit too far out and somewhat overly optimistic."

Sluggish integration has made it more difficult for Symantec to focus on its core products. The launch of its Norton 360

consumer suite, for one, has been delayed until early 2007, while the long-awaited product from Goliath,

Microsoft's

(MSFT) - Get Report

Live OneCare, has already made its debut.

Symantec also lost key executives like CFO Greg Myers, who retired, and COO and co-President John Schwarz, who jumped ship to become CEO of

Business Objects

(BOBJ)

.

Co-president and former Veritas CEO

Gary Bloom also left within months of the deal.

"Early results confirm that this is a challenging acquisition, and it's not clear to me yet that this has done anything to help them against Microsoft," says Todd Fernandez, senior research analyst with Glass Lewis, who wrote the initial proxy report urging a "no" vote on the deal.

He was opposed to the move because "there really was no mid- or near-term revenue synergies or combined revenue opportunities. The acquisition provided diversity, but we didn't see a strong argument for why investors couldn't just buy both stocks and get that exposure to diverse revenue streams."

Since the companies have combined, Symantec has guided lower three times. Management has been distracted with the deal, Fernandez says, and that's a concern when "they should be focusing on the 500-pound gorilla (Microsoft) entering the ring." His firm does not own shares or do business with the company.

"I think they've taken their eye off the ball in terms of some of their security products," says Andrew Jaquith, a security industry analyst with the Yankee Group. "Their answer to OneCare won't even come about until the first quarter next year. It's taking share from them in the consumer space. Waiting nine months is kind of surprising."

Fundamentally, however, even analysts skeptical of the move admit that the strategy made sense: Symantec needed to diversify its array of products before Microsoft entered the security market, and it has given the company a more comprehensive set of tools to sell to businesses.

And while investors might need more than one quarter to be convinced, the most recent quarter showed a glimmer of a turnaround.

Symantec shares have risen about 14% since their

latest earnings report in July, when it topped consensus expectations for profit and revenue.

The stock closed Wednesday at $19.60, as strong results in its most recent quarter have helped shares bounce off a 52-week low of $14.78 set this past July.

And other benefits have appeared, if they've been slow to emerge, analysts say.

"I think the biggest reason

the merger has turned out positively is that they realized pretty quickly that trying to jam it all into one category was not going to work," says John Pescatore, a security analyst with Gartner. "I think you've seen their message change."

The company has "focus

ed on

security and storage separately. You win because you are the best of breed in one area and then can cross-sell to the other area," he says.

And some analysts dismiss the idea that the merger alone kept a lid on Symantec shares.

"The stock would have come under pressure regardless," says Morgan Stanley analyst Peter Kuper. Microsoft's OneCare and its purchase of

Sybari

made it clear that the software giant was going to "commit hard dollars" to the sector. "

CEO John Thompson took the shot while he had it before it was too late." Morgan Stanley does and seeks to do business with the companies it covers.

Symantec "needed to make a fairly bold move to become a driver of the industry, rather than a follower," Kuper says.

EMC's

(EMC)

purchase of

RSA Security

(RSAS)

and

IBM's

(IBM) - Get Report

$1.3 billion deal for

Internet Security Systems

(ISSX)

seem to validate Symantec's move.

Still, sometimes the best deals are the ones that aren't made.

"This

thought that, 'Well, they had to do something': That is a time-honored Wall Street fallacy," Glass Lewis' Fernandez says. "I think mergers for mergers' sake has been a top contributor of destroying shareholder value over time."