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In VeriSign We Trust

Even though the IPO market has been anemic, there are some bright spots. One market that has been performing quite well is wireless. The market spans not only consumers, but business-to-business.

To carry out the wireless revolution requires many services. A critical one is security and encryption. A dominant player in the space is VeriSign .

The company calls itself the "Internet Trust Company." Of course, on the Web, trust is a hard thing. After all, you cannot see the person on the other side of the transaction. VeriSign's solution to the problem is digital certificates. It's kind of like an electronic version of your driver's license.

In all, over 200,000 Web sites use VeriSign services. Although, key to making VeriSign a standard, the company was able to get Microsoft and Netscape to use the software.

VeriSign has not rested on its laurels. The company wants to become the end-to-end hub for online transactions. However, building such an empire would take too long. So VeriSign has been melding together a variety of strategic acquisitions.

One was for Signio. With the purchase, VeriSign can now provide online payment services. These services hook seamlessly with a myriad of financial institutions and payment processors. More than 4,500 online merchants use the service.

Of course, the biggest buy was for Network Solutions. Network Solutions is a leader in domain name registration services. Providing VeriSign digital certificates to Network Solutions' customers is definitely a smart fit.

Whats more, Network Solutions is a well-run organization. In the past quarter, the company generated $98.2 million in revenues, which was a 157 percent increase from the same period a year ago. It was the 14th consecutive quarter that the company showed record profits ($14.7 million). The company has about $1 billion in cash and, in the past quarter, generated $118 million in cash from operations.

Finally, VeriSign has continued to innovate its service offerings. The company recently announced its newest technologies for validation, such as digital records, dispute resolution, and digital notarization. The software is geared for the advanced needs of online financial services, Net marketplaces and B2B exchanges.

The real potential stumbling block for VeriSign is if it fails to manage the disparate service offerings. The technologies are complex and so are the markets. But in the past, the company has had the vision to make things work -- making it a company for investors to trust.