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VeriSign sets its sights on telecoms market

VeriSign's chief executive has outlined a vision which would see his company at the intersection of Internet and telecommunication networks within five years.

The company's concentration on new business areas come as the domain registration service business, one of VeriSign's main business areas since it bought registrar Network Solutions in 2000, has got more competitive and begun to shrink. With the bursting of the Internet bubble and the release of new top level domain names, a catchy dotcom name is not as valuable today as it was perceived to be two years ago, so domain speculators are not snapping up hundreds of names. Recent data showed that during the fourth quarter of 2001, the number of domain names registered in the .com, .net and .org space dropped for the first time in history.

VeriSign looks after one of the Internet's major routing databases, the domain name service database for the .com, .net and .org top level domains and now sees the digitisation of telecommunication services and the growing importance of Internet telephony services as a chance to expand into a potentially huge new business area.

Last year the company paid $1.2bn (£0.8bn) to buy telephony services provider Illuminet Holdings The acquisition will help VeriSign launch a service offering corporate customers registration services for Enum, a new communications protocol that allows users to type a telephone number into a Web browser and then access associated records, such as Internet telephony, Web site addresses or e-mail addresses.

Later this year, VeriSign hopes to take its first steps in other areas of the telecommunication sector and begin offering SMS message services on mobile phones and instant messaging services over the Internet, Stratton Sclavos, president and CEO of VeriSign, said.

"By 2007, VeriSign will be a hub for computers and communications on the Internet and voice networks," he said. Operating a database at the centre of the Internet and telecommunication networks, Sclavos expects the company could be handling as many as one trillion database queries per day. In contrast, VeriSign's domain name database handled 5.4bn queries per day in the fourth quarter of 2001, the company said.

Should the company achieve this goal, Sclavos said he expects between 20% and 25% of revenues to come from telecommunication services in the one or two years running up to 2007.

The focus on telecommunication comes just as VeriSign is beginning to push into the area of Web services.

"In terms of new technology and new services, we believe the Internet is beginning its second wave," he said. "And many of the largest technology companies are now promoting Web services. Web services is very important because it can give us the next wave of productivity."

The Web services push was announced at the RSA Conference 2002 in late February in California, and was accompanied by deals with the three companies Sclavos mentioned and several others.

In Japan, VeriSign has tied up with Fujitsu to sell and integrate its security systems into Fujitsu's offerings for corporate users.

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