Magazine article American Banker

VeriSign's Immediate Future Looks like Return to Its Roots

Magazine article American Banker

VeriSign's Immediate Future Looks like Return to Its Roots

Article excerpt

VeriSign Inc., a company that was created to provide e-commerce authentication and made its fortune as the owner of the Network Solutions Inc. domain-name registrar, is likely to find growth in its original field, an analyst asserts.

"You have a renewed interest in security following 9/11," Nitsan Hargil, a senior technology analyst at Friedman, Billings, Ramsey & Co. Inc., said in a phone interview Thursday.

Though Network Solutions provides more than half of VeriSign's revenue today, "the other sector is growing much more rapidly," he said.

Authentication technologies -- tools that prove you are who you say you are -- are expected to have 26% growth in each of the next five years, Mr. Hargil said, citing statistics from International Data Corp.

Friedman Billings initiated coverage of VeriSign the weekend before Christmas with a "buy" recommendation and a $55 price target. The stock closed Friday at $38.90, down 0.03%.

The entire network-software industry is consolidating as its members' enterprise customers -- the big banks and other major corporate computer networks -- seek "something like an end-to-end solution," Mr. Hargil said.

"People are looking for a best-of-breed solution when it comes to security," he said. "They're not interested in second best. Ergo, a certain emphasis on VeriSign."

The Mountain View, Calif., company was born in 1995 as a spinoff of RSA Data Security Inc., the leader in data encryption. VeriSign's initial mission -- and still one of its core businesses -- was to promote digital certificates, computerized documents that employ paired data codes through what is called public-key infrastructure. …

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