For a time,
Bob Korzeniewski admits,
VeriSign Inc. did corporate development by the seat of its pants. Like when the company offered $19 billion in stock to buy
Network Solutions Inc. on a Thursday in March 2000 and signed the deal later that weekend. But even though that price would typify bubble-era dealmaking, the deal brought VeriSign one benefit: Korzeniewski himself, who moved from chief financial officer at Network Solutions to his current job as VeriSign's executive vice president for corporate development and strategy.
Still, the closing of the transaction in June 2000 marked the start of a tough period for the Mountain View, Calif.-based company. Korzeniewski spent six months working on integrating the companies. VeriSign spent 2-1/2 years more recovering from the deal and the downturn. "It's always hard to be bought by someone looking at a trend going straight up," he says. "It causes challenges."
Today's challenges are different. Along with driving strategy through acquisitions and partnerships, Korzeniewski has operating responsibility for the corporate domain name management unit. Maigread Eichten, general manager of digital brand management services, which helps corporations protect brands on the Web, reports to him. Korzeniewski also ran VeriSign's public policy group last year. He still works from NSI's old northern Virginia offices, and reports directly to CEO Stratton Sclavos.
Seat-of-the-pants deals are out. Korzeniewski and VeriSign are executing a strategy focused on growth areas such as telecom, search and security.
Each summer, the company's dealmakers meet with VeriSign's three business unit heads (communications services, naming and directory services and security services) to determine the new year's priorities - part of a planning exercise Bain & Co. helped VeriSign develop. Each business chief outlines three areas he believes will be sources of growth. Then the corporate development group studies areas and identifies key players in each industry.
A decision to push into managed security, made at last year's meeting, led directly to the largest of VeriSign's four recent acquisitions: its $135 million purchase of Guardent Inc. in February. This was no rush deal. Only after meeting with seven other security companies did Korzeniewski's group pursue privately held Guardent. "By the time we go to Stratton, we say: 'We met with companies A through G. Here are strengths and weaknesses. Here's why we've identified Guardent as the top candidate, and these are the parameters of any deal,' " he says.
The corporate development team numbers about 14 and includes Dan Mosher, who leads Internet and security M&A, and Dave Sitomer, who oversees communications deals. Though the team meets with bankers quarterly to solicit outside ideas, VeriSign used no investment bank on Guardent. If a target is publicly traded, however, Korzeniewski says VeriSign probably would seek such advice.
Korzeniewski's unit is also responsible for developing pilot projects and taking them through the incubation process. VeriSign recently moved into telecom, led by Chris Parsons, a former BellSouth Corp. business development head, who started a small, 15-customer project around voice over Internet protocol last year; now VeriSign is developing a VoIP directory, and the technology is becoming a key part of its strategy.
"VeriSign's strength is finding an ecosystem that has started to develop but that needs a trusted third party to take it to the next level," Korzeniewski says.
As it pushes into new areas, VeriSign is slimming down in less important ones. In November it sold an 85% stake in the domain name registrar it acquired from NSI for $100 million. The low price didn't bother Korzeniewski, since VeriSign didn't think it had a competitive advantage in the field. "If it's nonstrategic, price is important but not key," he says. - Joshua Jaffe
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Dealmaker Resumé
Robert Korzeniewski of VeriSign Inc.
Position: Executive vice president, corporate development and strategy. He is responsible for the company's M&A, partnerships and incubation strategy. Reports to CEO Stratton Sclavos.
Previously: Chief financial officer of Network Solutions Inc.
Education: Holds a bachelor of science degree in business administration from Salem State College. |
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