As CEO of VeriSign Inc. (VRSN), the largest seller of Internet security software, Stratton Sclavos already holds the keys to e-commerce. Now, with his pending acquisition of Network Solutions Inc. -- the company that hands out and tracks the vast majority of Web addresses -- he's about to grab hold of the entire doorway.
Since the beginning of the year, Sclavos has used bold acquisitions to build the most complete provider of services that companies need to get onto the Web. VeriSign has long specialized in digital certificates -- encrypted strings of software that establish the identities of parties to Web transactions. Then, in February, VeriSign spent $1.4 billion to buy Signio, which provides payment services for online merchants. When the $9.5 billion Network Solutions deal closes this summer, Sclavos says the three companies will each be able to take advantage of the others' customer bases and skills. The millions of companies that register so-called domain names with Network Solutions, for example, would be offered VeriSign's certificates and Signio's payment service. "We've got something that really has the potential for exciting symmetry," says Sclavos. Together, the three companies will have sales of nearly $1 billion this year.
Merging Silicon Valley-based VeriSign and Virginia-based Network Solutions could pose some problems. But Sclavos, who likens VeriSign's Mountain View (Calif.) headquarters to Fort Knox, says the new partners share a similar obsession with security and reliability. "We're more like banks than we are Internet companies," Sclavos says. If e-commerce is really going to take off, having a banker control the keys to the vault door may not be such a bad thing.
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Copyright 2005, by The McGraw-Hill Companies Inc. All rights reserved.
