CORRECTED-OFFICIAL-UPDATE 3-Symantec to buy VeriSign business

By Jim Finkle

SAN FRANCISCO, May 19 (Reuters) - Symantec Corp agreed to buy VeriSign Inc's widely used technology for securing payments over the Internet in a deal worth $1.28 billion, the companies said on Wednesday.

The acquisition gives Symantec, the world's biggest maker of security software, VeriSign's Internet security business including its crown jewel -- the SSL technology for securing electronic payments and other Internet transactions by scrambling the data when it travels over the Web.

It comes less than a month after Symantec agreed to spend $373 million to buy two other makers of technology for encypting data: PGP Corp and GuardianEdge. Together the three acquisitions are part of a strategy by which Symantec is focusing on protecting content, rather than taking its traditional approach of securing the equipment where information resides.

'Devices are irrelevant,' Symantec Chief Executive Enrique Salem said in an interview. 'An iPhone is cool today. But who knows what will be cool tomorrow.'

Salem said that he had approached VeriSign, whose headquarters is 200 yards from his office. As far as he knows there were no other bidders.

'They eat in our cafeteria,' Salem said. 'We've been in discussions for a very long time.'

Sale of the security unit leaves VeriSign in one main business -- managing more than 100 million Internet domain names, including those ending in .com and .net. Over the past three years, it has sold off or shut down nearly 20 business units to focus on its high-margin Internet domain business.

VeriSign's security businesses accounted for about $410 million of its $1 billion in sales last year.

Symantec expects the deal to lower its non-GAAP earnings per share by 9 cents in fiscal 2011, but to start adding to profit in the quarter that ends in September 2010.

VeriSign shares were little changed in extended trade on Wednesday, after they fell 0.85 percent on Nasdaq to $27.99. They had climbed 5 percent on Tuesday following media reports that VeriSign was poised to announce the deal.

VeriSign is well known for its secure socket layer, or SSL, technology that encrypts financial transactions over the Internet and authenticates the identity of that site to the user. Some 1 million websites use VeriSign's SSL products, according to Symantec, which plans to cross sell its other products to those customers.

VeriSign also offers other identity verification services as well as one that ensures websites are safe to browse, which account for just 15 percent of revenue.

Barclays Capital advised Symantec, and JPMorgan advised VeriSign.

(Reporting by Jim Finkle. Editing by Robert MacMillan, Carol Bishopric and Richard Chang) Keywords: VERISIGN SYMANTEC/ ([e-mail] [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.