VeriSign Inc.VRSN

Morningstar Rating

Stock Research and Analysis

by Rafael Garcia

We believe VeriSign continues to move in the right direction. Despite possessing a formidable Internet franchise, the firm has had a penchant for acquiring businesses for the sake of revenue growth--a strategy that did not create shareholder value. Read more

Bulls Say

The company maintains pricing power over its core services. VeriSign raised registration fees for .com and .net by 7% and 10%, respectively, in October 2008. Moreover, the company is allowed to raise registration fees in three out of the next six years.

Increasing network threats and corporate compliance requirements should continue to drive strong sales for enterprise network security solutions.

VeriSign's database technology allows it to route Internet users to the correct Web destinations. This has positioned the company well to address opportunities such as voice over Internet protocol, which requires smart database search and lookup. Read more

Bears Say

The CEO, CFO, and chairman have all been recently appointed to their roles. Although the three members have strong managerial experience, they assumed the reins of VeriSign in the midst of operational restructuring.

The company's acquisitive nature raises the possibility of overpaying for an acquisition or facing difficulties in integrating new businesses into its operations. Read more

Strategy

VeriSign's strategy has been to enable and secure all sorts of Internet and digital telecommunications transactions. The company follows a buy versus build approach to get into new markets, such as content Read more

Management

There has been a lot of turnover in VeriSign's executive suite, marred by the sequential resignations of two CEOs and two CFOs over the past few years. Cofounder and chairman Jim Bidzos assumed the CEO position on an interim basis upon William Roper's Read more

Profile

VeriSign provides infrastructure products and services that enable and secure transactions over the Internet and telecommunications networks. It acts as the exclusive registrar Read more

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