Ken Bond - VP of Investor Relations Bill Roper - President and CEO Bert Clement - CFO

Todd Raker -- Deutsche Bank Rob Owens - Pacific Crest Peter Kuper - Morgan Stanley Sterling Auty -- J.P. Morgan Sarah Friar - Goldman-Sachs Katherine Egbert - Jefferies Steve Ashley -- Robert W Baird Scott Sutherland - Wedbush Morgan Security

Good day and welcome to the VeriSign Incorporated fourth quarter and fiscal 2007 Earnings Call. Today's call is being recorded. At this time, for opening remarks, I would like to turn the call over to Mr. Ken Bond. Please go ahead sir.

Thank you Ronnie. Good afternoon everyone and thank you for joining us for VeriSign's fourth quarter 2007 earnings conference call. I am Ken Bond, Vice President of Investor Relations and I'm here with Bill Roper, President and CEO, of VeriSign and Bert Clement, our Chief Financial Officer. A replay of this call will be available, beginning at 5:00 p.m. Pacific Time, via telephone at 888-203-1112, or 719-457-0820 for international callers and will be available through February 6. The pass code for both numbers is 1256242. The press release and financial information discussed on today's conference call is available on the Investor Relations section of the VeriSign website at investor.verisign.com. The Q4 2007 press release is also available via First Call, Market Wire, as well as website. For those of you joining us via web cast, we also invite you to view the slide presentation which accompanies today's conference call. These same slides will be available for download from our website after the call. Financial results in today's press release are unaudited and the matters we will be discussing today include forward-looking statements and as such, are subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC. Specifically, the most recent report on Forms 10-K and 10-Q in any applicable amendments, which identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements. Additionally, financial statements in today's press release and the matters we will be discussing today may include non-GAAP measures used by VeriSign. Our non-GAAP income statement and a description of items excluded in our non-GAAP financial information are located on the VeriSign Investor Relations website. In a moment, Bill and Bert will provide some prepared remarks and afterward we'll open up the call to your questions. Unauthorized recording of this conference call is not permitted. We anticipate the call will end at approximately 3:00 p.m. And with that, I would like to turn the call over to Bill. Bill?

Thanks Ken. In this call, I would like start with some comments on our performance for the fourth quarter and from there, I will recap the year with few highlights, then touch on some areas that we believe are of particular interest to our investors based on conversations we have had with shareholders. These topics include how we are managing the business in this period of transition, how and what we plan to communicate with investors during the course of 2008, and an update on our progress since the Analyst Day in November. Bert will then discuss our financial results for the fourth quarter and provide some limited guidance before we move to the Q&A portion of the call. So with that, let's talk a bit about fourth quarter and all of 2007. Q4 was a solid quarter and is driven by our core franchises of Naming and SSL. We reported total revenues of $386 million, which was slightly above the high end of our previous guidance. The reorganization that we begin implementing early in the year and the disciplined expense management that are continuing to bear fruit as our non-GAAP operating margins for the quarter improved 25.1%, an improvement of over 650 basis points from year ago levels. Non-GAAP earnings per share were $0.30 and that's a penny ahead of consensus estimate on strong revenue in operating margins and interest income. Moving now to the business metrics for the fourth quarter, I would like to talk a bit about our core businesses starting with Naming. The Naming business continues to show strength as the adjusted zone for registered names in .com and .net now total 80.4 million names, compared with 77 million names last quarter and that's an increase year-over-year of 24%. The growth is driven by continued global internet adoption with 7.5 million new domain name registrations for .com and .net that we processed during the quarter as well 10.5 million renewals, which continue to show strength. The underlying growth drivers this quarter consistent with prior quarter’s solid growth in both U.S. and international, and while we see solid growth domestically we also continue to develop international opportunities, having accredited over 25 registrars in China, India, Latin America, regions that we see the possibility of showing significant growth potential for both .com and .net. We also saw continued growth from all our customer segments, corporate, SMB, consumer and online advertising. The online advertising activity remains a small, but consistent part of our new name sales in overall base. The renewal rate for the third quarter was 74% and we expect the actual renewal rate for the fourth quarter will be similar to last quarter, both within our historical range of mid-70, 73 or 77%. Then finally, the digital infrastructure structure is now handling peak loads of over 33 billion DNS request per day, 33 billion with the B. Our unique capability to operate global network at this scale and reliability remains unparalleled. Let me repeat, no one else operates global networks and infrastructure of this nature at this volume level or with a 100% uptime over the past decade, core strength and unique capability of our company. Moving to security services, I’ll start with our second core franchise SSL. We sold over 233,000 certificates during the quarter and while Q4 has traditionally been a strong quarter for the SSL business, this year was no exception. We saw excellent sequential growth in orders. Our installed base has now grown to 938,000 certificates compared with 912,000 last quarter. We are pleased with this growth as it represents 3% sequential and 16% year-over-year growth in this business base. At the Analyst Day in November, we introduced an annualized average unit revenue metric for the installed base. We believe that this new metric provides investors an easier means of understanding revenue performance and trends in this business. For Q4, the AUR, annualized average unit revenue or AUR where the installed base of VeriSign GeoTrust and Thawte branded certificates was $273. And that is up from the prior quarter's $271, a small increase across all brands. We are also especially pleased with results of our EV or extended valuation certificate as we met our targets for 2007. More than 2000 of our customers have gone green with EV and the demand for the EV certificates continues to be strong in Q4. And while this pipeline is still in early stages, we are the number one provider of EV type certificate in this market at this time, and we continue to expect that the EV adoption cycle will be consistent with previous premium priced products in the past. Microsoft’s comments last week about this adoption further give us confidence of the EV growth potential. I will now turn to share some comments on the progress of our identity and authentication services business. In the past, we have used different labels for this business including VIP, identity protection, identity services and other such names. Going forward, we are going to refer to this business as Identity and Authentication Services, IAS for short and it consists of our services such as the VIP program and a One-Time Password or OTP authentication services program as well as fraud detection services and our enterprise PKI business. The VIP and OTP program has continued to be a great example of an internet scaled service running on a global infrastructure that provide scaleable and secure real time validation capabilities that can support millions of online users. Across our VIP and OTP program, the strength continues as we have now sold over 1.3 million credentials and we continue to be pleased with the strong update of these credentials by consumers and we expect to see this adoption continue to ramp. This quarter, we are also to note that Yahoo announced its support of the OpenID 2.0 digital identity framework, joining companies like Google, Microsoft and IBM. Yahoo has 248 million registered users, all of them now have an OpenID identifier bringing the total number of OpenID accounts to over 350 million users worldwide. And we believe that this is a significant development for our identify authentication efforts as the aggregation of first factor authentication into an OpenID only increases the importance of second factor authentication services that VeriSign offers. I'll now take a quick look back at 2007 as a whole. We think it proved to be, to say the least, an eventful year for VeriSign, starting with a company wide restructuring, which began the changes leading to the non-GAAP operating margin improvement of over 650 basis points that we mentioned earlier. This is where we continue to focus on and we expect operating margins will be significantly higher yet again this year. As many of you may recall, we made several management changes starting in late May, when I was named Chief Executive, shortly thereafter, Bert was named Chief Financial Officer and, we have made some additional changes over the second half. More recently we name Ken Silva as our Chief Technology Officer. While we may to see more additions, I am very pleased with the team in place and their commitment to execute on the plans that we have developed and that we communicated to you in November. One of my initial objectives when taking over as CEO was to complete the stock option restatement process, align the company to become current in financial filings. We accomplished that in early July. And in November, we received confirmation from the SEC that its investigation of VeriSign has been closed. This is an important milestone and putting these matters behind us. Another early objective, we wanted address with our capital structure and in August we issued 1.25 billion in convertible debt and we used the majority of the proceeds to repurchase 38 million shares of common stock, reducing the shares outstanding by about 16% during the second half of 2007. Finally, and this is actually good safe way to the next topic. We completed a comprehensive strategic business review. And while there is much work ahead us, we are committed to the resulting strategy. So with that, I would like to talk about how we are managing business especially with all the myriad activities underway at this time. To start, because we are mindful that we must avoid the potential for distraction to our ongoing core businesses, we have taken a sort of dividing and conquer approach with the management team, so as company we can remain focused on continuing to develop and grow our core businesses, as well as maintain a continuity and optimize the eventual sale of the businesses being divested. The majority of our senior management team, including [Reynard Quist] who manages our Naming business and [Chris Bebo], who manages our SNL business, along with me, continues to spend the majority of our time focused on protecting and growing our core businesses. And the business is being divested; John Donovan and Grant Clark are focusing on managing these businesses to ensure continuity in their operations until each has been transitioned to a new owner. And finally, as we discussed at Analyst Day, Rusty Lewis and Kevin Werner are working on managing the sales process of the businesses we are targeting for divestment. So I guess in summary, by having a few of our senior leaders focus on the businesses being divested, we believe that we minimize the distractions to the rest of the team of who we are focused on protecting and growing our core business operations. As we discussed at our Analyst Day, 2008 is going to be a very interesting with a lot of moving parts, as we expect to work through a number of divestures over the course of the year. Having taken steps to ensure that we maintain the right focus on our core businesses, I want to share with you how we intend to communicate to you our activities and results over the coming quarters. To start, during the first quarter, we intend to place all qualifying businesses into discontinued operations for accounting, reporting purposes. We believe this step will help investors better understand the financial performance of our core businesses, which we believe is the key to our long-term shareholder value. And as a reminder, our continuing operating results will include the lag effect for elements of indirect overhead G&A cost, which will be reduced overtime as we complete the divestment transactions and associated transition service agreements. However, we do believe that the discontinued operations accounting treatment for businesses being divested is a positive step and helping investors understand the operating performance of our core businesses. Our operating margins of the core businesses will also be impacted by increased investments in these businesses that we focus more intently on developing a broader product set and reinvigorate in the growth potential we see in these great businesses. We'll be providing revenue and operating margin guidance on our core businesses, which include Naming, SSL, and Identity Authentication Services including a majority ownership in VeriSign, Japan which is focused around these core businesses. And for the businesses being divested, we report on the status of the divestment activity as appropriate throughout the year. I'll like to now provide a brief update of our progress since Analyst Day November. As you recall, we discussed our strategic business review process wherein we evaluated each business in terms of whether it was a good fit with our core strength in internet infrastructure, as well as factors such as market size, growth rate, inherent economics, as well as competitive position in our ability to win in the market place. From this process, we identified three business clearly being good fits, Naming, SSL and Identity and Authentication services. As you know, Naming and SSL are just two great businesses, leading market share in growing markets. Each business also leverages our internet infrastructure, which as I stated earlier, remains unparalleled in terms of scale and reliability while providing us powerful economics. The Identity and Authentication Service business addresses a large market opportunity for VeriSign. The business is small today, but it is expected to grow rapidly and it also leverages our internet infrastructure as well. We've now completed the strategic business review and with the exception the core business is previously discussed again Naming, SSL and Identify and Authentication Services, we intend to divest each of the remaining business discussed during Analyst Day, including those noted as requiring additional time for decision. So having completed the strategic business review , I would like to update you on the status of our divestiture efforts. Overall, I described our progress as being on track and up to our expectations as discussed earlier. We expect that there will be a half dozen or more transactions over the course of 2008 and we have already started to market several of these businesses and expect to add a couple more shortly. We are pleased with the level of interest to-date, both solicited and unsolicited, it's been high and it's been from both strategic and financial buyers. We are really pleased with the quality of the potential buyers. And while we realize that interest alone does not a transaction make, we continue to be satisfied with our early progress and as we close transactions, will continue to keep you informed. I'll now turn the call over to Bert for a walk-through of our financial results for the fourth quarter and 2007, as well as guidance. Bert?

Thanks Bill and thanks to everyone for joining us this afternoon. Before turning to the fourth quarter, I would like to briefly highlight the results for the year 2007. For the year consolidated revenue excluding Jamba! was $1.47 billion, up over 15% year-over-year. Our non-GAAP operating margin for the year again excluding Jamba! was 22.6%. Non-GAAP earnings per share for the year was a $1.03 an increase of nearly $0.30 a year-over- year after excluding Jamba! for both years. Cash flow from operations for the year was strong in excess of $450 million. Finally, our 2007 capital expenditures were $152 million, as we continue to build out our new Delaware data center. Turning now to fourth quarter highlights. Q4 was a solid quarter on multiple fronts, Having come in slightly above our revenue guidance at $386 million and 10 basis points higher than our non-GAAP operating margin guidance. Exiting Q4, at 25.1%, 670 basis points higher than Q4 of last year. Non-GAAP earnings per share of $0.30 came in penny above consensus estimate, as operating income and interest income were both better than expected. On a GAAP basis we reported a net loss of $0.88 per share, due to an estimated non cash impairment charge of $210 million in Q4 as we prepared the Digital Content and Messaging business for sale. The actual evaluation has not yet been finalized. In Q4, we completed our accelerated share repurchase program earlier than originally expected as we repurchased 6.6 million shares at an average price of $30.17. Moving to the second half of 2007, we repurchased a total of 38 million shares at an average price $30.22, reducing basic share outstanding by 16% since June 30th. As an update, our Board recently authorized an additional 600 million share repurchase. I would now like to move to more detailed discussion of financial results for the fourth quarter. Q4 revenues at $286 million was up 14% year-over-year excluding Jamba! and as noted earlier slightly above the high end of our guidance. The growth was driven again by the continued strength in our core businesses. As in past quarters, we are reporting based on our two business segments ISG an CSG. The Internet Services Group, grew approximately 4% sequentially and 20% year-over-year with revenues of $244.7 million or 63% of total revenue. This growth was fueled by strength in Naming SSL and Security services. The Communication Services Group grew 1% quarter-over-quarter with revenue of $141.8 million or 37% of total revenue. Excluding Jamba!, CSG was revenue up 4% year-over-year. Moving to international operations, the percent of revenue driven from international customers, affiliates and subsidiaries was 15% as compared to 16% last quarter. Cost of revenue for Q4 was $142 million, down $1 million from last quarter and driving a non-GAAP Q4 gross margin of 63.3%, up a 150 basis points, sequentially. Factors contributing to the increase in gross margin included continued reductions in headcount and reduction of direct expenses. Turning to operating margins, total operating expenses for Q4 was $148 million or 38.2% of revenue, down from 38.4% last quarter. The percentage decline was expected, given our expectation to grow expenses at a lower rate than revenue. We ended the quarter with a non-GAAP operating margin of 25.1% compared with 23.4% last quarter, a 170 basis point improvement from last quarter and a 670 basis point increase from Q4 2006. Income below the line was better than expected contributing to our better than expected EPS. In particular, interest income was strong, as cash balances ended the quarter at $1.4 billion due in part to better working capital management and higher than normal employees stock option exercise. Non-GAAP net income for the fourth quarter was $70 million with the non-GAAP earnings per share of $0.30, which is a penny above consensus estimates, due primarily to operating and interest income as previously discussed. The diluted share count on EPS calculation was slightly below 230 million shares. Moving on to the balance sheet and cash flow item, our ability to consistently generate solid operating cash flows resulted in our maintaining a strong balance sheet with ending cash equivalent and short term investment at $1.4 billion, an increase of $255 million from last quarter. Capital expenditures for the quarter were $58 million with 21% attributable to CSG, 28% to ISG, and 51% for corporate infrastructure. The increase for corporate infrastructure this quarter is related to the construction of the Delaware operation center, expected to be completed in the first half of 2008. Operating cash flow for the quarter was strong, in excess of $180 million. There are multiple drivers to the positive free cash flow this quarter, including strong accounts receivable, collection stemming from the invoicing issue discussed last quarter, deferred revenue growth, employee stock option exercises and other favorable working capital items. Net DSO for the fourth quarter returned to historical level at 44 days, as invoicing issues discussed last quarter have been resolved. Our Q4 ending deferred revenue was $739 million, up $28 million from the previous quarter and a 22% year-over-year increase. This increase, in deferred revenue was driven by strong sales in Naming and SSL. We ended the quarter with 4,250 employees, 120 lower than last quarter and almost 1,100 less than where we began in the year. Moving now to guidance, as Bill mentioned earlier we intend to place all qualifying businesses into discontinued operations during Q1. As a result we are providing guidance for our core businesses, which include Naming, SSL and Identity and Authentication Services. For Q1, we expect revenue for our core businesses to be in the range of $215 million to $220 million. As a reminder, during our Analyst Day, we discussed the lag effect to operating margins, so 2008 margins will reflect the inclusion of the significant, indirect, overhead expenses, which will be reduced overtime. We remain confident that we'll substantially complete all divestitures during 2008 and that we will complete necessary overhead realignment shortly thereafter. However, we are not in a position to forecast exactly when divestitures will take place within the year. As a result, we are providing the following guidance around operating margins. We now expect that in light of our decision to focus fully on our three core businesses of Naming, SSL and IAS. We expect the Q4 2008 exit operating margin will be 35% or higher on a non-GAAP basis, approximately 1,000 basis points higher than our current operating margin and 500 basis points higher than estimates provided, as part of our Analyst Day. This operating margin guidance also reflects increased investments we'll make in our core businesses as mentioned earlier by Bill. Additionally, we are reaffirming our commentary from Analyst Day as we expect that the Q4, 2008 year end fully diluted share count will be 200 million shares or less. In summary, we are pleased with our execution in 2007, particularly as it relates to revenue growth from our core businesses, as well operating margin expansion and we recognize the importance of executing our strategy in 2008 as the key to unlocking shareholder value in longer-term. We'd now like to open the call for your questions. Operator?

Thank you. (Operator Instructions). And we will go first to Todd Raker with Deutsche Bank. Todd Raker -- Deutsche Bank: Hey guys. How are you?

Doing well. Thanks. Todd Raker -- Deutsche Bank: So, Bert, on the guidance given that you are going to have your corporate overhead continuing to '08, can you give us any sense for where you think operating margins will be on the three core businesses as we look into '09 as you back the overhead out?

Yeah. I think the way we are handling the guidance is the 35% number that we provided you as what we are targeting for the company as an exit rate 2008. And I think from there we would seek some improvement into 2009. Todd Raker -- Deutsche Bank: Okay. And can you give us a sense within ISG, kind of quantify the amount of revenue being shown in discontinued ops, so we didn’t get a sense with the $215 million to $220 million guidance? How that lines up versus ISG today?

I didn’t get that, we are breaking up on the call. You said something about ISG? Todd Raker -- Deutsche Bank: Yeah. I was trying to -- if you look at your guidance on a three core businesses, I am trying to correlate the 215 to 220 versus kind of what ISG is today. So, if you’d give us a sense for kind of the magnitude of revenues that will be discontinued ops out of ISG?

I don't have the exact details of that breakdown with us. I think what we are trying to do is focus everyone on the core business, knowing that the qualifying businesses for discontinuing operations in Q1 may be slightly different than that. Todd Raker -- Deutsche Bank: Okay. And then one general question for you guys. On the naming side two questions. One, can you talk about any negative impact of the price increase or is there anything out there that would indicate that the second price increase shouldn’t be forthcoming? And then, can you comment on [what are] articles around the names have been and how I can potentially prevent free dipping going forward? Do you anticipate that having impact on your growth profile at all in the DNS business?

Okay. Let me see if remember both parts of the question well. So catch me Todd if I don't completely answer. On the second part, you talked about dipping or pay-per-click and so forth. There are changes going on in the marketplace out there. We don't really comment on those changes, we just react to them. We think possibly at the margin there could a very small impact on us, that probably you won’t be able to measure. The first question was around pricing. Todd Raker -- Deutsche Bank: Pricing, any…

Well, pricing, okay. As you know we implemented a price increase of 7% for .com and 10% for .net mid-October last year. We haven’t seen any measurable impact of that price increase. We don't believe that at these prices, the market is very sensitive to that. You know the contract that we signed was a six-year contract and it provided up to four price increases, no more than one a year during the term. And we are constantly evaluating our product pricing policy throughout the company, but we don't comment on anything else. Todd Raker -- Deutsche Bank: Okay. Thanks guys.

Thank you. We will go next to Rob Owens with Pacific Crest. Rob Owens - Pacific Crest: Yeah, good evening everyone. Focusing again on the registries, so if I look at the sequential increase, I think it was one of the slower increases you’ve seen this year. Are we starting to see this become the large numbers or there is some seasonality baked in there? And I have a follow-up, too.

Okay. Rob, the short answer is, there maybe some seasonality. If you go back to the fourth quarter of the prior year it was the similar type of increase in units quarter-over-quarter. So there may be a little seasonality in there. We’re not really sure. I mean all indicators are, all the drivers in that business global, internet, usage and adoption rates remain very strong and we’re very comfortable about the future growth of this business. Rob Owens - Pacific Crest: Okay and then along the SSL side, how should we think about pricing moving forward, especially with EVS also becomes a bigger portion of the portfolio? How much can that drive in terms of increase in that ASP you're giving?

Hard to tell, but EV itself, which as you know is a premium price product, is doing very well. We’re very pleased with it. It’s on the lower part of the parabolic curve that we’ve experienced with other or with the similar premium priced products in the past. So, it’s not really having a material impact on the whole portfolio the AAUR, whatever we call it Rob, of the whole portfolio, yes. But certainly it will tend to start having an impact and we’re continually getting orders and we feel good about the business and where its going. It's still small at this stage. Rob Owens - Pacific Crest: Great and then last question -- any metrics you willing to share around the ID and Authentication Services, anything that can help us track that business? How many credentials have you got?

Total credentials that we mentioned in the prepared commentary. Rob Owens - Pacific Crest: That obviously was an annual number, correct?

That’s total out, I mean, that’s the total number of [identity] sold and in place, is that right?

Yeah, 1.3 million and last quarter 1 million.

Yeah and I think it was a $1 million quarter ago so you can get an idea of sort of increment there. Again in the relative scheme of things that business is fairly small for us today but it is very, it’s a niche market, it is growing. We think it has got huge growth potential. We are very excited about the business. We are investing in the business and we feel very good about it. It’s small but we think it’s a big part of our future. Rob Owens - Pacific Crest: Great. Thank you.

(Operator Instruction) We go next to Peter Kuper with Morgan Stanley. Peter Kuper - Morgan Stanley: Great, thanks guys. Actually, if I could turn back to the Todd's line of questioning there. That operating margin of 35% guys, that was not including the corporate overhead, did I hear that right?

No, we are including corporate overhead in that rate and that's our target for year end. Peter Kuper - Morgan Stanley: Okay. I'm sorry, that's the exit rate Bert…

Exit rate at year end we are targeting to get the 35%. Peter Kuper - Morgan Stanley: Okay.

Yeah, what we are trying to communicate is that as we make divestitures, some of the indirect cost which have to be charged to the continuing operations, don't just drop off instantaneously with the divestiture and you have to manage them down. And so there is a little bit of a lag effect there. And so, you won't see total benefit of that, so say maybe a quarter after a divestiture or something. We are going to manage it very tightly, but as Bert said, our pro forma op income margin, exit rate fourth quarter where we've now stepped up to attain, we think it will be a 35%.

And Peter we'll keep you updated on that on a quarterly basis just to tell you our progress and hopefully as we go into this continued ops we'll be able to kind of show that on the P&L itself as the year progresses. Peter Kuper - Morgan Stanley: Great. And then for Q1 guidance, so did you give the number of 215 to 220 for those core businesses, but no, did I miss this in any of our guidance around what -- do you have any margin for that business would be or anything color wise on discontinued ops? Because I think you said you have six deals or six transactions sometime in '08, but how is Q1 shaping up, just want this to get a better sense of the very near picture versus the end of the year picture?

Yeah. So I think it’s going to be an improvement quarter-to-quarter on the operating margin line and I think we will have hopefully the discontinued operation situation versus continuing cleared up pretty nicely by the end of Q2. Peter Kuper - Morgan Stanley: Okay. So that’s definitely the first half of that so to speak.

Yeah. That's definitely our target at this point for right now. Peter Kuper - Morgan Stanley: Okay. And then last question on the renewal rate, I think it was around 74% for Q3, that rate is just 73% to 77%. Do you guys feel that’s a comfortable go forward rate for next year as part of the guidance? Is that considered in that guidance filled up or do you want rates that’s not going forward.

Yeah. We have been in that range for a couple of year now. We believe that that's going to continue. Obviously, there are market factors they could have some impact but we still think we will be in that sweet spot range in the mid 70s. Peter Kuper - Morgan Stanley: Okay. Great. Thanks a lot.

Thank you. We will go next to Sterling Auty with J.P. Morgan. Sterling Auty -- J.P. Morgan: Thanks, hi guys.

Hi Sterling. Sterling Auty -- J.P. Morgan: I want to circle back, you guys kind of broke up, I am not sure if you answered it but so the guidance for the three core business is the 215 to 220 in the first quarter. Can you give us a sense what those three businesses generated revenue in the fourth quarter?

We were not going to go back and try to prorate everything quarter-to-quarter from the past, but I think we are sticking with Q1 is 215 to 220 at this point.

Sterling, and if you remember, mid year last year we told you that what we would do is we would give you end quarter revenue guidance, some kind of margin indication this year because of the murkiness of the factors we described, we decided we’d give you an exit rate margin, up income margin for the year end. And then as necessary we will talk about shares outstanding.

Now, Sterling, what I will do is reiterate that we do see growth in the high teens, so 18 to 20, potentially exceeding that is not an issue for that business. Sterling Auty - J P Morgan: Okay. And then maybe just – you mentioned the three core areas, as we think of ISG, just remind us the bucket or the things that come out from the businesses. In other words, you have IAS, but does that mean, security consulting, that gets sold? Now, what are the pieces out of ISG that are going out that were not formerly you outlined at the Analyst Day?

Yeah. The larger elements of ISG that will leave are going to be the managed security services business. That will include the security consulting aspect to that. And then, there are a couple of smaller businesses in there like digital brand management. For example that would be in that bucket as well. Sterling Auty - J P Morgan: Okay. And then, last question. Any just high level kind of commentary about what you are hearing through your conservations with customers and inter-operations about how you see the overall macro-economy both domestic and internationally kind of impacting the three core businesses that you are keeping?

Well, Sterling, you probably are better qualified than us to answer that question. We really don't view our – especially the two businesses, Naming and SSL as pretty much independent of the economic cycle. They are driven by internet usage and adoption rates globally. We have parts of the markets, especially internationally that we think we've under-absorbed or not invested in enough, that we are doing some very specific things starting early this year. We got a few new products [in froze] and product development things going on. So we feel that we'll have very attractive relative growth rates and we see the business continue to be solid and stable. Sterling Auty - J P Morgan: Great. Thank you.

Thank you. We'll go next to Sarah Friar with Goldman-Sachs Sarah Friar - Goldman-Sachs: Good afternoon guys. Kind of a derivative of Sterling’s question about the environment. Bill, to what extent do you think that the environment is having an impact on your ability to quickly spin-off the other businesses that you don't want to keep? Have you seen change in the dialogue, you may be having with potential acquirers etc?

Okay, that's good question, Sarah, and the answer is a good answer I think. As we said before, these really by and large are large very good businesses. We haven't necessarily managed in that that well. They don't necessarily fit. They don't fit that and that’s the reason we made the decision to divest of them in our strategy or within our core competence in internet infrastructure. That being said, they are good businesses, they are solid businesses and there are great additions for other companies. So, the interest, buyer interest has been, as I noted, strong, very encouraging, quality buyers both financially and strategically and kind of across the board. The size of these transactions and the nature of the buyers especially on the strategic side, the current financial markets don't really have much impact, I mean at the margin, we may get a little bit less realization in total purchase price. But not anything significant there, and in many cases the level of bidding the price indication so far from the first round [stats] on two of the larger properties have been very good, and we are encouraged. We consider our sales is on track from a time frame and we're seeing nothing that indicates we won't get somewhere between good to very good realization for VeriSign, while at the same time placing these businesses and our employees and our customers in very good hands. Sarah Friar - Goldman-Sachs: Great, okay, good. That was a good answer. Thank you Bill. Just one another question on the core registry business, there are really two parts. So, one, you've talked about reinvestment in the core business. When can we start to see some additional services rollout, now through the new icon agreement allows you lot of flexibility there? And then just part two, how you seen any impact on demand from the price increase today then kind of the core.com registry, that’s just one thing that are come up a little during the quarter?

Okay. Again I think, a good story, impact on demand is not measurable, we can’t find it. At the price levels we are talking, we are really pretty price insensitive. So, we just -- we don't see that being in this anything. So if it is there we can find it both in unit sales and real rates. If you go to a new products across the three core, we have a number of things in the pipeline primarily internally developed products, additions, improvement and those types of things that will help on the growth side and will help further building, strengthen and protect our position as market leaders. And we are announcing a number of things all alone that they are small and not noise level things like say EV or something like that, and specially on the Identity and Authentication Services business -- sorry I must get used to that acronym. VIP is so much easier to say, but probably not as descriptive. We’ve got a lot going on and you'll start seeing these things. They are hitting the market shortly. Sarah Friar - Goldman-Sachs: Great. Okay, thanks a lot.

Thank you. We go next to Katherine Egbert with Jefferies. Katherine Egbert - Jefferies: Hi, good afternoon. Can you give us an estimate of what kind of domain growth you expect for this year? And then can you tell us the member of active domains versus those, that have been activated, not just bought?

Yeah. I think we've seen a modeling growth in the high teens to 20% range on units. I think the active domain number, Ken has found it here right now, is in the 70% range may be even higher than that.

I think it is more about 80 range.

80 range, probably that’s just..

It’s just less than 10% to 15% that domains don’t resolve. Katherine Egbert - Jefferies: Okay. That's helpful. Thanks. And then can you -- I don't think you said can you tell us how close you are to selling off some of these bundles, meaning is the process still fairly so long?

Well, we didn’t say but we have a lot of activity ongoing. We have a couple of bundles of businesses in the marketplace now. We like a said to very good initial interest. We are going into the second round. And it's very difficult to predict timing, there is aspects of that process we can control and certainly aspects of that process are totally outside of our control. I can just tell you we are on track from a time line and we are pleased with the early indications. Katherine Egbert - Jefferies: Okay. And then last question. I don't know if you answered this, but can you talk how much cash do you expect to get from the sale of these assets?

We haven't talked about that. It's material...

We are hoping to get about 10% of our market cap as cash received hopefully.

Yeah. I mean the way you should think about it, you should think about these businesses as being 10% of the company from a value standpoint plus or minus or point or two. Katherine Egbert - Jefferies: Okay. That's helpful. Thanks guys.

Next we will go to Steve Ashley with Robert W Baird. Steve Ashley -- Robert W Baird: Great. My first question is on differed revenue, how should we think about the divestitures when they are completed? How might that impact the differed revenue balances, maybe just qualitative?

Yeah. Most of the deferred revenue is going to stay with us because it's tied into the Naming and SSL businesses. There are a couple of other businesses that have a little bit of deferred revenue but I would say at least 96% to 97% of that deferred one will stay with the company. Steve Ashley -- Robert W. Baird: And did FX have much impact on the reported revenue this quarter?

Pardon me, one more time? Steve Ashley -- Robert W Baird: Currency exchange, did FX have much impact on the revenue you reported this quarter?

I don't think it was very significant, no. Steve Ashley -- Robert W Baird: Great, thank you.

The bigger businesses are dollar based. Steve Ashley -- Robert W Baird: Okay.

Thank you. (Operator Instructions). We'll go next to Scott Sutherland with Wedbush Morgan Security. Scott Sutherland - Wedbush Morgan Security: Well, thank you. Good afternoon. Really just had one follow-up and the question, maybe trying to get a start point and end point to the remaining segments not being discontinued. I might have missed it. But what kind of operating margins do you expect here in Q1 for the continued operations? And when you look at Q4, I know you were in corporate overheads, just over $20 million right now. To get that 35% operating margins I assume the assumption that stays around $20 million or you can bring it down to maybe $15 million to $20 million range and bring it down in ’09 from there?

I think the hard part for us is try and understand when these divestitures are going to actually happen. So we are confident that we can give you a decent number for operating margin for Q1. So what we have done is instead given you exit operating margin for the core business for year-end and we do hope to get that number overtime incrementally every quarter. Scott Sutherland - Wedbush Morgan Security: Okay. So there is no range of corporate overhead that you guys have a near assumption that's 35% like $10 million to $20 million, I mean, knowing that it's a wide range?

Yeah. We are still dissecting the corporate overhead right now in the sense of what is clearly direct versus indirect. There are some very accounting rules there on what you can apply in discontinued operations versus what has to stay in continuing. If you recall, we did go to a function of organization earlier in 2007, so we have to be very careful how we present that go forward. So I think the key is, we've taken a conservative approach on it, on what will probably remain and then we will be whacking at it every single quarter and especially as the businesses [lead] try to tighten up the overhead thereafter. Scott Sutherland - Wedbush Morgan Security: Maybe ignoring the discontinued operations and the corporate overhead, what kind of segment margin profile would we see if these remaining three segment in total?

Yes, I think we’ve told you exiting the year at least 35% and that some of the ongoing synergies would come in 2009. So, we would expect some incremental improvement from there. Scott Sutherland - Wedbush Morgan Security: Okay, fair enough, thank you.

Thank you we’ll go next to Todd Raker with Deutsche Bank. Todd Raker - Deutsche Bank: Hey guys, just a follow up question to help us with the modeling aspects. In Q4, can you give us a sense ISG right now runs at 82% gross margin? You guys are going to pull the Managed Security Services business out of that which is a very low gross margin product. I would assume that the three core businesses should see a gross margin north of 82%. Can you frame it for us in terms of Q4, so we it can be triangulated in the apex run rate to get to the margin of 35%?

You know Todd, I think what we’re going to try and do is frame it to you on a go-forward basis. A lot of that has to do with, for example, if you look at our capital expenditures, we told you that the data center is sitting in corporate. While it really doesn’t belong in corporate, it belongs in those businesses, and that’s going to be some other important enhancements we’re going to make in 2008. Todd Raker - Deutsche Bank: Is it a fair assumption to assume that, since you are pulling the Managed Security Services business out that the gross margin associated with the three core business is higher than 82%?

It’s a fair assumption. Todd Raker - Deutsche Bank: Okay, on a consistent basis.

On a consistent basis.

Right, on a consistent basis.

It will be higher.

Because we’ll be making some investments, there will be increased depreciation for the data centers and other things that will - it won't be as high as you might think it is, but it's something that we’ll share with you all during the year. Todd Raker - Deutsche Bank: Okay, thanks.

Hey, Todd you don't get another deal. That is all you get.

Thank you. We'll go next to Rob Owens with Pacific Crest. Rob Owens - Pacific Crest: Great. So at this time given the guidance you laid at the Analyst Day, are you reiterating then the lower end of that earnings per share range to the $1.15 because I think you gave us a revenue range on the three core businesses of around $900 million? Thanks.

Yeah. I think what we are really saying is on an exit rate basis; the 35% is really going to depend on a variety of things on how well we do to that and along with the share count at year-end. But remember that's an exit rate number that we are trying to portray at Analyst Day and we are hoping to do a little better in that.

Just to confirm Rob, we did not provide earnings per share guidance today for the quarter or the year. Rob Owens - Pacific Crest: Okay. So you are not speaking to the Analyst Day of the $1.15 to $1.29?

The number that we talked about today, you can use for modeling going forward. Rob Owens - Pacific Crest: Great, thanks.

Thank you. We go next to Katherine Egbert with Jefferies. Katherine Egbert - Jefferies: I have to ask a follow-up, since everyone else is doing it. So you said just a minute ago that the definition of discontinued op is pretty strict, and you lastly talked, I don't think you are going to put everything into this discontinued ops, so what changed?

No, I think what we telling you as we're getting give you guidance based on a continuing businesses that are core to U.S. There maybe a few differences in between, but I don't think they are going to be significant. Our view is by the end of the first half, we ought to be fairly consistent at that point. Katherine Egbert - Jefferies: Okay. So does that mean though that your revenue number for next quarter could actually include some of the businesses that you'll be divesting?

No, what we gave you is a pure revenue number for just the three core businesses. We wanted to be very clear about that. Katherine Egbert - Jefferies: Okay. But if a business doesn't go into discontinued op, it stays in your revenue line right?

That's correct. And we will reconcile for you when we get there. Katherine Egbert - Jefferies: Okay. Thank you.

Sure.

Thank you. We have time for one final question. We will take that question from Peter Kuper with Morgan Stanley. Peter Kuper - Morgan Stanley: Sorry, I [won't] go round about here.

Are there only about five guys on the call, is that what the problem is here? Peter Kuper -- Morgan Stanley: We just love you so much. We just want to talk you more and more.

That works for us. Peter Kuper -- Morgan Stanley: Straight forward and I think whatever we are trying we are all talking about the same stuff here. Trying to figure out for Q1 just talking about the exit rate margins, what are you guys expecting from a consensus point of view? If there are models, obviously to be tossed upside down here with the three core model, three core business being a model, end of the exit year I get that. So we have a directional good idea where we are going. But for Q1 how are you guys feeling about what we should be modeling from an operating margin point of view there?

Yeah. I think the best advise I can give you from there is take our exit rate at Q4 and what we gave you as a exit rate for '08 at the end of the year, and kind of factor -- I wouldn’t say factored in linearly, but factor in some improvement quarter-to-quarter to get to that 35% by the end of year, that's best advise I can give you. Peter Kuper -- Morgan Stanley: Okay. All right, that's pretty sure. We will work with that. And then I guess on that, you guys I would hope obviously by then we will able to do year-over-year comparison with the three core business on a growth rate?

As we get it all cleaned up that will be come very apparent. Peter Kuper -- Morgan Stanley: Okay. Great. Thanks.

Thank you. And at this time I would like to turn the program back over to Mr. Ken Bond for any additional or closing comments.

Thank you Ronnie. We anticipate that our next quarterly conference call, which will reflect our first quarter 2008 results will be held on Wednesday April 30 at 2:00 pm Pacific Time. Final confirmation of this date will be provided the first business date after the close of the quarter on April 1. I would also like to remind you that in light of Regulation FD, VeriSign plans to retain its long standing policy and not comment on this financial guidance during the quarter, unless it is done through a public disclosure. Please call the Investors Relations department with any follow-up questions from this call. Thank you for you participation and continued support. This concludes our call. Thank you and good evening.

That concludes today's conference. You may disconnect your lines at this time.