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VeriSign fuses assets into one system

The Net services company is planning to announce a broad technology upgrade intended to piece its numerous recent acquisitions into a cohesive company.

Internet services company VeriSign plans to announce Monday a broad technology upgrade to its systems, in the hopes of stitching together the Internet and telecommunications companies it has acquired in recent years.

VeriSign aims to unify its internal technologies so it can provide backend voice and Net services to companies and network operators at a much lower cost. The result, the company hopes, will solidify its position as the underlying utility for telecommunications and the Net.

Executives have called the technology project "Atlas," for Advanced Transaction Look-up and Signaling system. It is currently running in parallel with the company's older systems and is expected to take over full-time duty as a central database of information in the third quarter of this year.

"It's one of many things they are working on," said Israel Hernandez, equities analyst with investment bank Lehman Brothers. "They've acquired a number of assets over the past couple of years, and now they're trying to put the pieces together. It makes some sense if they can put it all together."

Details of VeriSign's plans will be announced at a press conference Wednesday at the annual Supercomm telecommunications industry conference taking place this week in Atlanta.

News on the technology front comes as the company continues to be hurt by the precipitous downturn in technology spending as well as shortfalls in the registration of new Internet domain names, a cash cow for the company. VeriSign has also recently been accused of overly aggressive marketing in two lawsuits, one by a privately held provider of domain names called BulkRegister.

"One thing they need to improve is their operating profitability, and they have to adjust their expense base for a lower revenue base," Hernandez said, "particularly on the infrastructure side."

VeriSign has acquired 12 companies since the beginning of last year, highlighted by a recent push into esoteric telecommunications signaling and billing systems through deals for Illuminet Holdings and H.O. Systems. As a result, it has a myriad of disparate technologies providing different services to diverse markets, according to the company.

VeriSign's plans are based on the presumption of Net and telecommunications technology "convergence"--an oft-spoken trend that has been slow to take hold but is evident in the future strategies of many network operators and Net companies.

It was the 1999 deal for domain name registrar Network Solutions, at the height of the dot-com boom, that prompted the company to develop Atlas. At the time, VeriSign Chief Executive Stratton Sclavos said the jewel in the deal was the registry technology that could associate a domain name with a numeric Net address. But the real goal of the transaction was to tie the registry to other network-based services, Sclavos said at the time.

VeriSign performs 7.5 billion to 8.5 billion domain name lookups per day, according to the company. The Atlas system is built to handle upwards of 100 billion lookups in addition to supporting a variety of voice and Net protocol technologies that are likely to spawn new services, such as geographic location technologies for wireless networks, the company said.

Executives said the company has spent hundreds of millions of dollars on its overall technology infrastructure, with the Atlas project accounting for an undisclosed portion of that sum. As a result, Atlas will lower VeriSign's capital and operating costs by as much as 30 percent, according to the company.

The move comes as VeriSign has seen a downturn in registrations of new domain names, a trend that has affected the company's bottom line. But executives insist that there is more use of its registry system, even if the dot-com implosion has lessened the purchase of new Net addresses by consumers and businesses.

"People continue to use the Internet in new and innovative ways, even if domain name registrations are static," said Aristotle Balogh, vice president of engineering. "What we see, that no one else sees, is these incredible spikes (in traffic). These systems weren't meant to handle it--it's patchwork."

The company will run its new Atlas database on IBM's AIX brand of Unix, Sun Microsystems' Solaris brand of Unix, Linux and FreeBSD--an open-source version of Unix.

Separately, VeriSign on Monday will announce two new customers, Trico Wireless PCS and NTCH, for its telecommunications billing services. It will also announce a new service to help network operators comply with the federal Communications Assistance for Law Enforcement Act (CALEA) by a June 30, 2002, deadline.

Illuminet and H.O. Systems will also now be part of the VeriSign brand, according to the company, organized within a new telecommunications services group.