) recently applied for nine Internationalized Domain Name
(IDN) transliterations of .com and three IDN
transliterations of .net.
The applications submitted by VeriSign represent approximately
12 out of the 14 new generic Top Level Domain (gTLD) applications.
The company submitted the applications through the Internet
Corporation for Assigned Names and Numbers' (ICANN) new gTLD
IDN aims to make the Internet more user-friendly to end users
all over the world by enabling them to identify themselves using
their native language scripts. VeriSign has applied for IDN
transliterations of .com in nine non-Latin based scripts.
Management expects these non-Latin based transliterations of
.com and .net to open more options for global Internet users.
VeriSign has also applied for verisign and .comsec along with
the 12 IDN transliterations of .com and .net. Additionally,
applicants for approximately 220 new gTLDs selected Verisign to
provide back-end registry services.
However, revenue from new gTLDs is not expected to be material
before 2013. VeriSign views the introduction of new gTLDs as an
adjacent growth opportunity. This should positively impact results
in the coming years.
VeriSign's registry, security and communications services are
essential for the smooth functioning of the online world.
Meanwhile, in the past few years, VeriSign undertook a
restructuring plan that streamlined its business, selling off
non-core businesses while relocating its headquarters.
It remains to be seen how the streamlined company generates a
growth trajectory given the change in management. Although the
fundamentals remain solid, earnings estimates have declined
marginally after the company reported disappointing results for the
first quarter of 2012.
However, we maintain our Neutral recommendation. Our
recommendation is supported by Zacks #3 Rank, which translates into
a short-term rating of Hold.
VERISIGN INC (VRSN): Free Stock Analysis Report
To read this article on Zacks.com click here.