VeriSign (VRSN)

Our 3IS segment recorded revenues of $936.3 million in 2008, an increase of 20% from last year.

We recorded income from continuing operations of $92.6 million in 2008, compared to a net loss from continuing operations of $147.7 million in 2007.

We sold certain non-core businesses for aggregate net cash consideration of $102.4 million, and recorded an aggregate net loss on sale of $13.7 million, net of an aggregate income tax benefit of $5.2 million, including estimated losses recorded prior to sale. See “Assets held for sale and Discontinued Operations” in Item 7 of this Form 10-K for further information.

We sold our remaining 49% ownership interest in the Jamba joint ventures to Fox for $199.4 million and recorded a gain of $66.9 million, net of an income tax expense of $11.0 million.

We acquired Global Name Registry, Ltd. (“GNR”), the registry operator for the .name gTLD, for net cash consideration of $11.7 million.

We recorded an other-than-temporary impairment charge of $8.2 million relating to our investments in certain money-market funds managed by The Reserve’s Primary Fund (the “Primary Fund”) and The Reserve International Liquidity Fund, Ltd. (the “International Fund”). For further information, see Note 8, “Other Balance Sheet Items,” Prepaid Expenses and Other Current Assets, of our Notes to Consolidated Financial Statements in Item 15 of this Form 10-K for further information.

We terminated the $45.0 million trust established during 2004 for our director and officer liability self-insurance coverage and classified the amount as Cash and cash equivalents as of December 31, 2008, as our ability to use it is no longer restricted.

We repurchased 38.6 million shares of our common stock at an average stock price of $34.07 per share for an aggregate cost of approximately $1.3 billion under the 2008 and 2006 Stock Repurchase Programs. As of December 31, 2008, we have $950.0 million remaining for further repurchases under the 2008 and 2006 Stock Repurchase Programs.

We sold certain land and buildings located in Mountain View, California, for net cash consideration of $47.6 million. At the time of closing, we entered into a separate lease agreement with the purchaser of the property for an initial term expiring on December 31, 2010, with an option to extend the lease for five years from the date of expiration of the initial term. We recorded a loss of $79.1 million upon sale of the property.

Our 2008 restructuring plan was announced in late 2007 to complement our plan to divest our non-core businesses. We recorded $69.6 million in restructuring charges related to the 2008 restructuring plan, inclusive of amounts for discontinued operations. Of the total restructuring charges, expenses related to severance and benefit costs for terminated employees, inclusive of amounts for discontinued operations, totaled $63.8 million. Since announcing the 2008 restructuring plan, we have reduced our headcount in businesses targeted for divestiture, either through the sale of businesses, employee terminations or voluntary resignations.

Total revenues from our Internet Services Group increased $158.2 million, primarily due to continued growth in our Naming Services and Information and Security Services businesses. Total revenues from our Communications Services Group decreased $224.9 million, primarily due to a decline in revenues that resulted from the divestiture of our majority ownership interest in our Jamba business unit in January 2007.

We saw a 24% increase in 2007 in active domain names for .com and .net under management. The increase is primarily due to increased demand for new domain names and high renewal rates for existing domain names.

We saw a 16% increase in 2007 in our installed base of SSL certificates. The growth is driven by increased demand for our VeriSign, GeoTrust and thawte branded certificates.

In January 2007, we sold 51% of our ownership interest in our Jamba subsidiary to Fox Entertainment (“Fox”), a subsidiary of News Corporation, for approximately $192.4 million in cash. Our total net gain from the divestiture was approximately $68.2 million.

In August 2007, we issued $1.25 billion principal amount of 3.25% junior subordinated convertible debentures due August 15, 2037, to an initial purchaser in a private offering. We received net proceeds of $1.22 billion after deduction of issuance costs of $25.8 million.

We used the proceeds from the issuance of the convertible debentures to repurchase approximately 38.0 million shares of our common stock for an aggregate cost of approximately $1.15 billion.

In the fourth quarter of 2007, we recorded an impairment charge of $182.2 million, $62.6 million and $4.3 million for goodwill, other intangible assets and property and equipment, respectively, related to our Content Services business reporting unit.

VeriSign completed a $1.25 billion junior subordinated convertible bond offering in August.

During the quarter, the company repurchased 31.4 million shares of common stock at an average price of $30.12.

VeriSign Identity Protection (VIP) services announced several new VIP Network members, additional authentication form factor options available to consumers, and successful adoption of the PayPal Security Key amongst PayPal’s customers in Germany and Australia.

Building on the strength of early adoption of Extended Validation (EV) Secured Sockets Layer (SSL) in the U.S. and Europe, online leaders such as E*TRADE Australia, Travelocity.ca and HMV have extended this new technology's footprint to all corners of the globe.

VeriSign recently announced that it has successfully completed key milestones for Project Titan, the expansion and diversification of its critical Internet infrastructure. Through Project Titan,

VeriSign has increased its infrastructure capacity to 2 trillion DNS queries a day, continued to diversify its infrastructure globally and created new tools and processes to better monitor and manage traffic and to implement various system upgrades. These upgrades are vital to managing the surge in Internet interactions and protecting against cyber attacks that are growing in both scale and sophistication.

In August, VeriSign announced that its board of directors appointed D. James Bidzos as chairman of the board. Mr. Bidzos, who founded the company in 1995, previously served as chairman from April 1995 until December 2001, and as vice chairman until his recent appointment.

Subsequent to the end of the quarter, Mark McLaughlin, executive vice president of products, marketing and customer service, announced he will be leaving the company to spend time with his family before pursuing other opportunities. Mr. McLaughlin will remain through the end of November to help transition responsibilities.

VeriSign announced the hiring of Kevin A. Werner as senior vice president of corporate development and strategy. Mr. Werner will assume responsibility for strategic development activities.

VeriSign also announced the hiring of Grant L. Clark as senior vice president and chief administrative officer. Mr. Clark will have primary responsibility for improving business processes and will also oversee the company’s operational and risk management activities.

In May, VeriSign announced that its Board of Directors had elected William A. Roper, Jr. as President and Chief Executive Officer. The Board also elected Edward A. Mueller as Chairman of the Board.

Earlier this month, the Company announced that its Board of Directors had appointed Albert E. Clement as Chief Financial Officer.

VeriSign’s Chief Technology Officer, Ari Balogh, was recognized by InfoWorld Magazine as a Top 25 CTO for his continued leadership of Project Titan, a three-year initiative to fortify and expand the capacity of the global Internet infrastructure.

On July 16, 2007, VeriSign announced that it had become current in its filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2006 as well as Quarterly Reports for the second and third quarters of 2006 and the first quarter of 2007.

Subsequent to completing its filings, the Company received notification from Nasdaq that the Company had demonstrated compliance with Nasdaq’s filing requirements under the Marketplace Rules, that the matter relating to the company’s listing status had been closed, and that VeriSign’s securities will continue to be listed on the Nasdaq Global Select Market.

John D. Roach has been appointed to the Company’s Board of Directors, effective July 19, 2007. Mr. Roach will serve on the Audit Committee of the Board of Directors.

At eBay Live! in June, PayPal announced the general availability of the PayPal Security Key, a two-factor authentication token that generates a unique security code to protect consumers against phishing and online fraud, in the United States, Germany and Australia. The PayPal Security Key is part of the VeriSign Identity Protection (VIP) Network, helping to prevent unauthorized access to consumer accounts on eBay, PayPal and a variety of e-commerce websites.

VeriSign and Live Earth integrated mobile messaging and online interactivity into events around the globe on 7.7.07 to enable millions of participants to use their mobile phones to personally participate in the broadcasts and live concerts demonstrating their commitment to making a change for the environment.

VeriSign partnered with AirMagnet in June to launch the VeriSign Wireless Intrusion Prevention Service (IPS), the first comprehensive service designed to effectively shield rapidly growing corporate wireless networks from data theft and other prominent security threats.

On April 5, 2007, VeriSign announced that as of October 15, 2007, the registry fee for .com domain names will increase from $6.00 to $6.42 and that the registry fee for .net domain names will increase from $3.50 to $3.85, per its agreements with ICANN.

During the quarter, VeriSign also announced Project Titan, a major initiative to expand and diversify the capacity of its global Internet infrastructure by ten times by the year 2010. This initiative will help to address the increase in domain name system (DNS) queries on VeriSign’s global infrastructure taking place as e-commerce, social networking and Internet-enabled wireless devices place significant new demands on the Internet.

In VeriSign Security Services, more than 1,000 companies have registered for the new Extended Validation (EV) SSL Certificates, which help protect users against online fraudulent activity by providing third party verification of a Web site’s authenticity. The certificates provide consumers with a visual cue, a “green” address bar in the Windows Internet Explorer 7 (IE7) Web browser, on Web pages where EV certificates are deployed.

In VeriSign Communications Services, VeriSign announced the launch of its Three-Screen Solution and Global Consulting Services for Media and Entertainment Companies. VeriSign has