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.
