UPDATE 3-Cisco to buy ScanSafe for $183 million

* Deal intensifies rivalry with Symantec, McAfee

* $183 mln price includes cash, other incentives

* Seen closing in Cisco's fiscal 2nd qtr

* Cisco falls 0.6 pct vs 1 pct drop in Nasdaq Index (Adds background, previous dateline NEW YORK)

BOSTON, Oct 27 (Reuters) - Cisco Systems (CSCO.O) is buying privately held Web security company ScanSafe for about $183 million, a move that will intensify its battle with security giants Symantec Corp (SYMC.O) and McAfee Inc MFE.N.

ScanSafe sells Web-based services that protect business computer networks and PCs from hackers, saving companies the cost of buying and installing software on their own equipment.

The top two security software companies, Symantec and McAfee, already sell such products, which are known as "cloud" services and whose sales are growing at a far faster clip than traditional software.

Cisco announced the deal on Tuesday, saying it expects the transaction to close in its fiscal second quarter that ends in January 2010.

The $183 million price tag includes cash and retention-based incentives, Cisco said.

The deal helps Cisco expand its security portfolio, which includes email and Web security software company IronPort that it bought in 2007.

San Jose, California-based Cisco has in recent months stepped up its pace of acquisitions. It announced deals for wireless equipment maker Starent Networks Corp (STAR.O) for $2.9 billion and Norwegian video conferencing maker Tandberg for $3 billion. Chief Executive John Chambers has said he was looking to do more.

Cisco shares fell 15 cents, or 0.6 percent to $23.55 in afternoon Nasdaq trade. That was narrower than the 1 percent drop in the Nasdaq Composite Index. (Reporting by Sinead Carew, Ritsuko Ando and Jim Finkle; Editing by Derek Caney, Bernard Orr)