Verisign Sells Domain Registration Biz

Verisign on Thursday announced the sale of its
consumer-facing Network Solutions domain registration unit to Pivotal
Private Equity in a deal valued at $100 million.

Less than a year after relaunching the
Network Solutions TLD registration brand, Verisign is exiting the business
to focus on its core Internet and telco infrastructure units.

Since acquiring Network Solutions in a massive $21 billion deal
in 2000, the Mountain View, Calif.-based Verisign has struggled with the
domain registration side of the business. Over the years, the company has
been at the receiving end of harsh customer service complaints and
accusations of overly aggressive marketing, including recent backlash
against the controversial SiteFinder service.

In a statement, Verisign made it clear that Thursday’s cash-and-stock
transaction involved only the registration unit. Verisign retains the
infrastructure side of the business, which includes control of the lucrative
.NET and .COM registries.

Terms of the deal call for Pivotal Private Equity to shell out $60
million in cash and a $40 million subordinated note for the registrar.
Verisign retains a 15 percent stake in Network Solutions. The deal is
expected to close in the fourth quarter this year.

Officials at Pivotal Private Equity could not be reached to comment on
plans for the Network Solutions registrar. The Phoenix-based real estate
developer recently formed a subsidiary to purchase middle-market purchases
and recapitalizations of under-performing tech companies. The subsidiary
was set up to pursue deals in the range of $10 million to $100 million,
which is the high end of the Network Solutions purchase.

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