VeriSign, Inc. operates intelligent infrastructure services that enable and protect
billions of interactions every day across the world's voice and data networks.
Through our Internet Services Group and Communications Services Group, we offer
a variety of Internet and communications-related services, including internet
security services, information services, network connectivity and interoperability
services, intelligent database services, content and application services, clearing
and settlement services, and billing and payment services. We market our products
and services through our direct sales force, telesales operations, member organizations
in our global affiliate network, value-added resellers, service providers, and
our Web sites. We are currently organized into two service-based lines of business:
the Internet Services Group and the Communications Services Group. The Internet
Services Group consists of the Security Services business and the Information
Services business, formerly known as Naming and Directory Services. The Security
Services business provides products and services that enable enterprises and organizations
to establish and deliver secure Internet-based services to customers and business
partners, and the Information Services business acts as the exclusive registry
of domain names in the .com and .net generic top-level domains, or gTLDs, and
certain country code top-level domains, or ccTLDs, as well as providing other
value added services, including intelligent supply chain services, real-time publisher
services and digital brand management services. The Communications Services Group
provides communications services, such as network connectivity and interoperability
services, Signaling System 7, or SS7, network services, and intelligent database
services; content services, such as application and content services and messaging
services; and commerce services, such as clearing and settlement services and
billing and payment services to telecommunications carriers and other users.
VeriSign was incorporated in Delaware on April 12, 1995. Our principal executive
offices are located at 487 E. Middlefield Road, Mountain View, California 94043.
Our telephone number at that address is (650) 961-7500 and our common stock
is traded on the NASDAQ National Market under the ticker symbol VRSN. VeriSign's
primary Web site is www.verisign.com. The information on our Web sites is not
a part of this annual report. VeriSign, the VeriSign logo, Jamba!, Jamster,
Thawte, LightSurf and certain other product names are trademarks or registered
trademarks of VeriSign, Inc., and/or its subsidiaries in the United States and
other countries.
Competition
Competition in Security Services. Our security services are targeted at the
rapidly evolving market for Internet security services, including network security,
authentication and validation, which enable secure electronic commerce and communications
over wireline and wireless IP networks. The market for security services is
intensely competitive, subject to rapid change and significantly affected by
new product and service introductions and other market activities of industry
participants.
Principal competitors generally fall within one of the following categories:
(1) companies such as RSA Security and Entrust Technologies, which offer software
applications and related digital certificate products that customers operate
themselves; (2) companies such as GeoTrust and Digital Signature Trust Company
(a subsidiary of Identrus) that primarily offer digital certificate and certification
authority, or CA, related services; and (3) companies focused on providing a
bundled offering of products and services such as CyberTrust. We also experience
competition from a number of smaller companies, and we believe that our primary
long-term competitors may not yet have entered the market. Furthermore, Netscape
and Microsoft have introduced software products that enable the issuance and
management of digital certificates, and we believe that other companies could
introduce similar products.
In addition, browser companies that embed our interface technologies or otherwise
feature them as a provider of digital certificate products and services in their
Web browsers or on their Web sites could also promote our competitors or charge
us substantial fees for promotions in the future.
Competition in Managed Security Services. Consulting companies or professional
services groups of other companies with Internet expertise are current or potential
competitors to our managed security services. These companies include large
systems integrators and consulting firms, such as Accenture, IBM Global Services,
Getronics and Lucent NetCare. We also compete with security product companies
that offer managed security services in addition to other security services,
such as Symantec and ISS, as well as a number of providers such as CyberTrust
and Counterpane that offer managed security services exclusively. Telecommunications
providers, such as MCI that acquired NetSec, provide managed security services
and are competitors. In addition, we compete with some companies that have developed
products that automate the management of IP addresses and name maps throughout
enterprise-wide intranets, and with companies with internally developed systems
integration efforts.
Competition in Communications Services. The market for communications services
is extremely competitive and subject to significant pricing pressure. Competition
in this area arises from two primary sources. Incumbent carriers provide competing
in-house services in their respective regions. In addition, we face direct competition
from national, unregulated companies, including Syniverse Technologies, Telcordia,
NeuStar and other carriers such as Southern New England Telephone Diversified
Group, a unit of AT&T. Furthermore, customers are increasingly likely to
deploy internally developed communications technologies and services which may
reduce the demand for technologies and services from third party providers,
such as VeriSign, and further increase competitive pricing pressures.
Competition in Commerce Services. Our wireless billing and payment services
also are subject to competition from providers such as Comverse, Amdocs, Convergys
Corporation and Boston Communications Group. We are also aware of major Internet
service providers, software developers and smaller entrepreneurial companies
that are or may in the future be focusing significant resources on developing
and marketing products and services that may compete directly with ours. Furthermore,
customers are increasingly likely to deploy internally developed communications
technologies and services which may reduce the demand for technologies and services
from third party providers such as VeriSign and further increase competitive
pricing pressures.
Competition in Content Services. The market for content services is extremely
competitive. Competitors include developers of content and entertainment products
and services in a variety of domestic and international markets, such as Jamdat
Mobile, LaNetro Zed, Infospace, Itouch, Wisdom Entertainment, Arvato mobile,
Monstermob, Motricity and Buongiorno/Vitaminic. This business also faces competition
from mobile network operators, such as Cingular, Verizon Wireless, Sprint, T-Mobile,
Vodafone, O2, Orange, E-Plus and Telef'nica, as well as Internet portal operators,
such as Yahoo!, AOL, T-Online and Google. Our inter-carrier messaging services
face competition from Mobile 365, Openwave and Comverse. Additional competitors
are handset manufacturers, such as Nokia and software providers such as Microsoft
and Apple. As the market for wireless data, including information and entertainment
data, matures, new categories of competitors, such as mobile phone companies,
broadcasters, music publishers, other content providers or others have begun
to develop competing products or services.
Competition in Registry Services. There are several registry service providers
for new gTLDs that directly compete with the services we provide for the .com
and .net gTLDs, as well as with the ccTLDs offered by us. The gTLDs .biz and
.info were launched in 2001, the gTLDs .name, .pro, .aero, .museum and .coop
were launched in 2002 and 2003, and the gTLD .mobi was launched in 2005. Domain
names registrations and other services within these gTLDs are available through
ICANN accredited registrars. In addition, we currently face competition from
the over 240 ccTLD registry operators who compete directly for the business
of entities and individuals that are seeking to establish a Web presence.
We also face competition from service providers that offer outsourced domain
name registration, resolutions and other DNS services to organizations that
require a reliable and scalable infrastructure. Among the competitors are UltraDNS,
NeuLevel, Affilias, Register.com and Tucows.com.
Competition in Intelligent Supply Chain Services. There are a number of companies
that provide intelligent supply chain services. For point-of-sale data, we face
competition from IRI and AC Nielsen, as well as smaller software companies.
For consulting services, we face competition from traditional consulting firms.
Competition in Real-Time Publisher Services. We face competition from various
smaller companies providing similar services.
Competition in Digital Brand Management Services. We face competition from
companies providing services similar to some of our Digital Brand Management
Services. In the monitoring services, registration and domain name asset management
area of our business, our competition comes primarily from ICANN accredited
registrars and various smaller companies providing similar services.
Several of our current and potential competitors have longer operating histories
and significantly greater financial, technical, marketing and other resources
than we do and therefore may be able to respond more quickly than we can to
new or changing opportunities, technologies, standards and customer requirements.
Many of these competitors also have broader and more established distribution
channels that may be used to deliver competing products or services directly
to customers through bundling or other means. If such competitors were to bundle
competing products or services for their customers, the demand for our products
and services might be substantially reduced and the ability to distribute our
products successfully and the utilization of our services would be substantially
diminished.
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