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VeriSign to buy messaging firm LightSurf

The $270 million stock deal is expected to bolster VeriSign's wireless push with multimedia messaging services.

VeriSign on Monday announced it plans to acquire multimedia messaging company LightSurf Technologies in a $270 million stock deal designed to bolster its wireless efforts.

With the acquisition, VeriSign plans to offer carriers a range of wireless data and content technology, from picture messaging capabilities to interoperable messaging.

The deal is expected to close by the end of the first quarter. VeriSign, which provides Internet services such as payment authentication as well as telecommunications services, said it plans to retain LightSurf's 250 employees.

LightSurf was one of the first companies to offer picture messaging on cell phones, debuting the service with Sprint in mid-2002. Initially derided as just another useless cell phone feature, photo messaging has proven to be a success over the last two years.

"We are very excited about the strategic value and cutting-edge capabilities that LightSurf adds to VeriSign's intelligent communications, commerce and content platform," Stratton Sclavos, VeriSign's chief executive, said in a statement. "LightSurf's innovative managed services and their strong record of success with carriers make them a natural fit with VeriSign."

Once thought of as just a PC-oriented company, VeriSign last year began an aggressive effort to move into the wireless market. In March 2004, the Mountain View, Calif.-based company purchased Unimobile, a provider of mobile messaging products for telecommunications carriers and businesses, in a $5.25 million deal.

Two months before that deal was announced, VeriSign unveiled new and upgraded products and services designed to help telecommunications carriers tie their networks together while providing the necessary security.

LightSurf, based in Santa Cruz, Calif., has been able to attract a number of other high-profile customers, including Canadian company Bell Mobility, Kodak, Rogers Wireless and Telecom New Zealand.

While photo messaging has helped redefine cell phone services, it is not without its problems. Despite the efforts of LightSurf and other companies, U.S. wireless operators still offer a "walled garden" when it comes to photo messaging; the messages can only be sent between handsets supported by the same carrier.