VeriSign snaps up Lightsurf for $270m

VeriSign on Monday announced it plans to acquire multimedia messaging company LightSurf Technologies in a $270m stock deal designed to bolster its wireless efforts.

With the acquisition, VeriSign plans to offer carriers a range of wireless data and content technology, from picture messaging capabilities to interoperable messaging.

The deal is expected to close by the end of the first quarter. VeriSign, which provides internet services such as payment authentication as well as telecommunications services, said it plans to retain LightSurf's 250 employees.

LightSurf was one of the first companies to offer picture messaging on mobile phones, debuting the service with Sprint in mid-2002. Initially derided as just another useless mobile feature, photo messaging has proven to be a success over the last two years.

Stratton Sclavos, VeriSign's chief executive, said in a statement: "We are very excited about the strategic value and cutting-edge capabilities that LightSurf adds to VeriSign's intelligent communications, commerce and content platform. LightSurf's innovative managed services and their strong record of success with carriers make them a natural fit with VeriSign."

Once thought of as just a PC-oriented company, VeriSign last year began an aggressive effort to move into the wireless market. In March 2004, it purchased Unimobile, a provider of mobile messaging products for telecommunications carriers and businesses, in a $5.25m deal.

Two months before that deal was announced, VeriSign unveiled new and upgraded products and services designed to help telcos tie their networks together while providing the necessary security.

LightSurf, based in Santa Cruz, California, has been able to attract a number of other high-profile customers, including Canadian company Bell Mobility, Kodak, Rogers Wireless and Telecom New Zealand.

While photo messaging has helped redefine mobile services, it is not without its problems. Despite the efforts of LightSurf and other companies, US mobile operators still offer a "walled garden" when it comes to photo messaging; the messages can only be sent between handsets supported by the same carrier.

Dawn Kawamoto and Ben Charny write for CNET News.com.