VeriSign Weighs Fate of Its CDN Business

VeriSign (VRSN) will seek to sell 10 of its 15 business lines, and is debating whether to include its Kontiki content delivery network (CDN) in the asset sales, according to the Wall Street Journal, which says the company's plans will be outlined today in meetings with analysts. VeriSign will focus on its core domain registry and SSL certificate businesses, and is likely to shed many of its communications-related units.

"We are, in effect, starting all over again," Todd Johnson, VeriSign's vice president of broadband-content services, told the Journal. "We want to signal to the market we are taking a different approach to how we grow the business." VeriSign is said to be in talks with private-equity firms and wireless-phone companies that could buy some of the units, and may shut down some of the businesses if buyers aren't found by the first half of 2009.

VeriSign's Intelligent CDN is a hybrid content delivery service combining traditional edge-based caching with P2P capabilities acquired through VeriSign's purchase of Kontiki in 2006. The Journal report says VeriSign sees content delivery as a growth business, but is concerned about the cost of remaining competitive as more companies enter the CND sector. The company will reportedly evaluate the CDN business over the next six months before deciding whether to divest it.

The changes at VeriSign began in May, when long-time CEO Stratton Sclavos resigned and was replaced by board member William Roper, who commenced a broad review of the company's operations.