The Other Side of the Symantec/Verisign Deal
Symantec Deal Is Just The Latest Chapter Of Verisign's Colossal Riches-to-Rags Story
By joltsik on Fri, 05/21/10 - 3:28pm.I am pretty bullish on the upside of Symantec's acquisition of Verisign. Frankly, I don't understand why Gartner is such a downer and focused on SSL alone. Oh well, to each his own.
Regardless of whether you think this is a good or bad deal, Verisign's divestment is just the latest sad chapter for a company that once had a market cap in the tens of billions of dollars. I know that this was a long time ago during the Internet boom. Heck, even GiantLoop, the fly-by-night CLEC I worked for raised about $200 million back then with no business plan.
That said, Verisign survived the Internet boom and bust cycle and GiantLoop was appropriately sent to the failed startup dust bin. So what did Verisign do? It diversified like crazy into a series of unrelated businesses. Perhaps company executives started reading 1970s business school case studies about conglomerates like Textron. That's the only explanation I can fathom.
Ultimately the market has verified what I always believed, that Verisign's moves didn't make business sense. Furthermore, I've heard anecdotal stories for years about Verisign's poor execution. Having acquired lots of companies, I think Symantec can fix this over time.
The technology industry is programmed to look forward in a constant search for what's next. That's a good thing in general but let's not forget about the lessons learned from the past. It's worth examining the troubled history of Verisign as a case study of what not to do.
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- Jon Oltsik is a principal analyst at Enterprise Strategy Group responsible for the networking and security services at ESG. Prior to joining ESG, Jon was the founder and principal of Hype-Free Consulting. Mr. Oltsik previously served as VP of Marketing & Strategy at GiantLoop Network where he managed all marketing activities and defined the company’s strategic vision. Jon was also a Senior Analyst at Forrester Research where he covered a wide range of infrastructure and IT topics. In this role, he was frequently quoted in business journals, including the Wall Street Journal, Business Week, and the New York Times, and was also the recipient of a prestigious "best research" award for his breakthrough report, "The Internet Computing Voyage."
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