Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : VeriSign (VRSN) -- Ignore unavailable to you. Want to Upgrade?

To: fred woodall who wrote (164)	4/23/1998 11:41:00 PM
From: fred woodall	Read Replies (1) \| Respond to of 1285

VeriSign of the times The public markets are betting that you want to know exactly who in cyberspace is sending you documents and receiving what you send. Consider the initial public offering of VeriSign (Nasdaq: VRSN). On January 30, its first day of trading, the digital certificate company's stock shot skyward 250 percent, from $14 to $49, and closed at $31. (It was still near that price at our press time.) Digital certificates are essentially password-protected IDs embedded in email and other transmitted documents. The certificates allow companies and individuals to transmit information securely via a certificate authority (CA)--which is sometimes also the certificate issuer, as is the case with VeriSign--that verifies the authenticity of the ID. The company was already doing big business when we looked at it two years ago (see "May I See Your ID?"). VeriSign, then a year-old spin-off of RSA Data Security, had already convinced Netscape, Microsoft, Oracle, Apple, and IBM to use it as a CA. Since then, NationsBank and British Telecom have also become customers. Forrester Research analyst Ted Julian says that he wouldn't trust the digital certification process to any company other than VeriSign. Choosing a CA that's juggling too many technologies, or one whose corporate parent's focus is elsewhere, is a risk, he claims. He cites Entrust Technologies, which acts as a CA but also develops enterprise security software, as a competitor that's spread too thin. "If you're doing a little encryption, a little messaging, and a little authorization," says Mr. Julian, "you're too diluted to be my CA." Nor would he bet on CyberTrust, another VeriSign rival, insinuating that, because it is owned by GTE, it must lack focus. The public markets evidently disagree. Two weeks before its IPO, VeriSign announced that in addition to its CA services, it had decided to begin offering software that enables businesses to handle parts of the digital certification process. (Since September, VeriSign has allowed companies to issue their own digital certificates internally, although it was still acting as their CA.) It's possible, of course, that the new software will cannibalize some of VeriSign's existing business, but the larger product base doesn't seem to have alienated investors. --Constance Loizos