On announcing its fourth-quarter and year-end numbers, VeriSign reported big sales and high expectations from its recently acquired mobile content business, but not enough to impress some analysts, who were banking on sales from the US market.
The mobile content business, acquired when the company bought European player Jamba! AG last May, brought in $94 million of VeriSign’s total revenue of $356 million for the three months to December 31. Revenue was up 41% on the year-ago quarter. Net income of $115 million compared to a loss a year earlier.
Given the continued momentum in our core businesses and the strong traction we are seeing in our mobile content business, we are now raising our guidance for 2005, CFO Dana Evan said. The firm now expects $1.5 billion to $1.55 billion, up from previous guidance of $1.425 billion.
VeriSign announced the acquisition of Germany-based Jamba last May, for about $273 million and said it expected $70 million in revenue from the business in the second half.
The US market, where the company changed the name of the service to Jamster!, evidently to capitalize on the -ster branding suffix made popular by the original Napster, is expected to be the big growth driver. The firm has already started advertising on youth TV.
The early returns have met, and in some cases exceeded, our expectations, chief executive Stratton Sclavos said in a conference call with analysts. Clearly the market in the US for mobile content is growing rapidly.
We’re obviously seeing a lot of interest in mobile content services, messaging services and the like, and that is going to fuel substantial growth this year, Sclavos said. VeriSign expects to be the market leader by the end of the year, he said.
The mobile content business is also filling in some of the growth blanks while VeriSign waits for technologies such as voice over IP and RFID to become adopted more broadly. The company has deals in place that could benefit it greatly in those areas.
