Ken Bond - VP, IR and Corporate Communications Jim Bidzos - Executive Chairman and Interim CEO Mark McLaughlin - President and COO Brian Robins - SVP and Acting CFO

Todd Raker - Deutsche Bank Sterling Auty - JPMorgan Phil Winslow - Credit Suisse Sarah Friar - Goldman Sachs Rob Owens - Pacific Crest Securities Ken Long - Cowen and Company Steve Ashley - Robert W. Baird Katherine Egbert - Jefferies Garrett Bekker - Bank of America-Merrill Lynch Rob Sanderson - Broadpoint.AmTech Fred Ziegel - Mackinac Research

Good day everyone and welcome to the VeriSign Incorporated fourth quarter fiscal year 2008 Earnings Call. Today's call is being recorded. At this time for opening remarks I would like to turn the call over to Ken Bond, Vice President of Investor Relations. Please go ahead, sir.

Thank you, operator. Good afternoon everyone and thank you for joining us for VeriSign's fourth quarter 2008 earnings conference call. I'm Ken Bond, Vice President for Investor Relations and Corporate Communications, and I'm here today with Jim Bidzos, Executive Chairman, Interim CEO of VeriSign; along with President and Chief Operating Officer, Mark McLaughlin; and Brian Robins our acting Chief Financial Officer. A replay of this call will be available beginning at 5 PM Pacific Time via telephone at 888-676-8776 or 913-312-1457 for international callers and will be available through February 11. The pass code for both numbers is 6496729. The fourth quarter 2008 earnings press release is available on FirstCall and Marketwire. The press release and the financial information discussed on today's conference call and a reconciliation of our non-GAAP information to GAAP is available on the VeriSign Investor Relations website at investor.verisign.com. For those of you joining us via webcast, we 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 disclose in detail in our documents filed with the SEC. Specifically, the most recent report on Form 10-K and 10-Q and 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 results in today’s press release and the matters we will be discussing today include non-GAAP measures used by VeriSign. Our non-GAAP income statement and a description of items excluded from our non-GAAP financial information is located on the VeriSign Investor Relations website. Also let me mention that we expect to file our 10-K no later than March 2nd. Our Analyst Day is now scheduled for May 14, and will be held here in Mountain View, California. We look forward to the event and hope to see many of you here then. In a moment, Jim, Mark and Brian will provide some prepared remarks and afterwards, we will open up the call to your questions. Unauthorized recording of this conference call is not permitted. And with that, I would like to turn the call over to Jim. Jim?

Thanks, Ken, and good afternoon to those of you joining us today. As many of you already know Mark McLaughlin, recently rejoined the company and was named President and Chief Operating Officer. I'm very pleased to welcome Mark back to the company, as he and I have a great working relationship and as knowledge of the company and our industry will allow him to hit the ground running like no one from the outside could. Mark, would you like to say a few words before we start.

Good afternoon, I just want to say it's great to be back at the company. I've always known the company has tremendous talent and business strengths and we're excited to be back as part of the team to help take it to the next level. My transition into the company has been smooth. I've worked with this team before and understand where we're going as a company, having played a key roll in the development of our strategy. Looking forward, Jim and I remain focused on protecting and growing our core businesses and divesting those businesses we have discussed as being non-core. I'm committed to seeing this strategy through to success and I'm glad to be back as part of the team. With that, Jim let me turn it back to you.

Again, welcome back. And what a truly extraordinary economic time, I'm pleased to report that VeriSign delivered a very solid quarter that capped off a very solid year. For Q4 on a non-GAAP basis we delivered revenue of $245 million, earnings per share of $0.28 and we exited 2008 with operating margins slightly above 35%, and with nearly $800 million in cash. It's noteworthy that we also repurchased more of our shares in 2008 than we did in 2007 and we were buying during Q4. I believe these results demonstrate several things. First, that our strategy of focusing on our core businesses is the right one. Divesting non-core businesses while protecting and growing our core businesses is the right thing for VeriSign to do. Second, the financial results show that our business unit realignment has allowed us to identify inefficiencies and control costs despite our not having completed divestures. We believe we have the financial focus and discipline to manage the businesses successfully including discontinued operations. Third, these results show that while we did not have as much success as we had hoped for in selling non-core businesses, we still managed to have a stronger balance sheet that positions us to pursue opportunities in the downturn where many companies may struggle just to survive. Despite the weak economy and frozen credit markets, we still managed to sell 7 of 12 businesses, as well as our interest in the Jamba joint venture, raising over $300 million in a recession long and deep enough to cause unemployment to dramatically rise and to have the government proposing and implementing very significant stimulus and bailout plans. I'm grateful to the VeriSign employees, including those in discontinued operations, who worked hard and delivered for the company. Now let's go into a more detailed review of the quarter. Like many of you, we are increasingly realizing that the broader downturn is going to be deeper and longer than originally expected. More importantly, we are seeing definite signs that our core businesses are being affected as well. Last quarter we discussed how the macroeconomic environment could potentially affect us. This quarter, many of the possible effects we discussed materialized, resulting in a slowing of our core businesses, impacting our naming business in particular. I would like to start with a brief overview of our financial results, which Brian will discuss later in greater detail, followed by review of our business and operating results for the fourth quarter. From there, I would like to touch on areas that we believe are of particular interest to investors, based on conversations we've had with shareholders, including how the weakening economic environment is impacting our core businesses, and an update on our divesture activities. Starting with the business review; I'm pleased to report that our core businesses had a solid quarter, and I would like to again thank all of our employees for their continued focus and commitment to VeriSign. Revenue for core businesses was $245 million, which was at the higher end of our revenue guidance of $242 million to $247 million. Brian, will discuss this in more detail, but there were a couple of items effecting core revenue this quarter in ways that we did not anticipate. The net effect of these items is that core revenue was $1 million lower. Despite the revenue adjustment, non-GAAP core operating margins were 35.1% for the quarter, slightly above our guidance of 35%. In November of 2007, we set the goal of improving our operating margins to 35% or higher by the end of 2008, and we're pleased to have achieved results in line with this goal last quarter as well as this quarter. Non-GAAP earnings per share for the fourth quarter were $0.28. Our press release will note that the GAAP tax provision is preliminary, which Brian will discuss later. However, this has no direct effect on the non-GAAP earnings per share of $0.28. Before moving to the business review, I would like to mention that we're beginning to realign our three core businesses into two business units, with SSL and IAS being consolidated into a newly formed business unit, we will be calling Authentication Services. In addition the marketing and development synergies, we believe the realignment will provide an important benefit of allowing us to reduce a portion of the shared service cost prior to the completion of the divesture process. Moving now to our Naming business, we saw growth of 12% year-over-year as we adjusted zone for registered names and .com and .net grew to 90.4 million names at the end of the quarter. In total, we processed 6.3 million new domain name registrations during the quarter, compared with 7.5 million names during Q4 2007. The decline in new name registrations was expected and reflects the continuation of weakness in names, registered for the purpose of participating in online advertising networks as the Earnings Per Click or EPC or domain name holders continues to weaken. As discussed in the past, we expect that online advertising will increasingly become a smaller part of our Naming business. Currently these names make up 7% of the adjusted zone. As a result we plan to discontinue the reporting of metrics for online advertising after this quarter. As appropriate, we will continue to discuss meaningful events and trends with respect to online advertising or other relevant areas of the adjusted zone. Last quarter, we noted seeing possible signs of softness in new name registration or traditional names. Unfortunately, the broader economic downturn has impacted traditional names as well and what we saw in October continued over the remainder of the fourth quarter. New name registrations or traditional names during the fourth quarter were approximately 5.9 million, 12% lower than the same quarter Q4 2007. On a net basis, we added one million names to the adjusted zone this quarter, including a net increase of two million traditional names, which now represents 93% of the adjusted zone and a decline of one million online advertising names as we expected. We expect that weakening economic conditions will contribute to slowing growth rates in 2009 for the total worldwide domain zone, as well as for our dot.com and dot.net zones. As a result, we're not providing formal guidance for the first quarter net editions to the adjusted zone expect to say we're not forecasting a decline in the adjusted zone in Q1. Typically, Q1 is our strongest quarter for new name registrations and we expect that this will be the case this year as well, however, given the composition of the expiring name base, we also expect that Q1 will also see the highest number of non-renewals. Our expectation is based on what we can observe and project about the current environment. Should there be significant changes in the broader market, our outlook could change as well. Even as we're seeing declines in online advertising and slowing in traditional names within North America, we're also seeing continued growth in international markets; markets where we have focused efforts to develop regions for growth potential in both .com and .net overtime. While overall growth of the adjusted zone maybe slowing, we know that the growth rate is similar to the growth rate of all other gTLDs on a combined basis. The renewal rate for Q3 rounded up to 72%, but was down from 73% in Q2. While the Q3 renewal rate decline was most obviously affected by domain names registered for the purpose of monetizing online advertising traffic, the renewal rate for traditional names also came down in Q3. While renewal rates are not fully determinable until 45 days after the end of the quarter, we believe that for Q4 it may decline slightly more than 1%, with the Q4 renewal rate rounding down to 70%. Finally, our internet infrastructure continues to operate at peak loads of nearly 50 billion DNS requests per day, as our systems again demonstrated that VeriSign's capability of being able to operate global networks at this scale and reliability remains unparalleled due in large part to our continued investment and infrastructure such as Project Titan. As a reminder, no one else has operated a global network infrastructure of this nature at this volume level or with 100% uptime over the last 11 years, even as we remain one of the most attacked global networks on the planet. The SSL business saw the installed base increase to 1,118,000 certificates compared with 1,095,000 last quarter and 987,000 in Q4 of '07. We're pleased that this growth represents 13% year-over-year growth in the base. Fourth quarter SSL revenue increased 9% year-over-year and the annualized average unit revenue or AUR for the installed base of VeriSign, GeoTrust and thawte branded certificates was $248, down from an adjusted AUR of $251 last quarter. As discussed in prior quarters, the lower AUR also reflects the continuation of product mix shift as GeoTrust continues to grow faster than the overall portfolio. Looking forward, we expect that GeoTrust will continue to grow faster, meaning, we expect to see further AUR declines as unit volumes grow faster than revenue. While still a small portion of our SSL business, extended validation or EV certificate sales continue to be strong as we more than doubled the units sold a year ago. And we remain the market share leader for EV certificates, however, as discussed last quarter, we continue to see the effect of the economic slowdown on EV adoption as large scale customers again ordered less than what we expected. As discussed last quarter, we expect that the mainstream adoption of EV certificates will be pushed out until we see improvements in the broader economy. Last quarter we also discussed a shift in buying patterns by some large scale customers to begin placing smaller but more frequent orders, as customers are manning to their certificate requirements carefully. Also, in our retail and channel business, which typically served customers with less than five certificates, Q4 is typically a seasonally weak quarter, however, this Q4 was weaker than normal for the retail business, as we saw a decrease in new certificate sales and delays in renewals. Our channel partners also saw the same economic challenges as did the overall SSL market. These examples make clear that the weakening economy is affecting our SSL business with the net effect being that some portion of certificate sales are not occurring, or are being deferred, and that our SSL revenue growth will be in the single-digits. I would like to now take a quick look back at last year as 2008 proves to be another eventful year for VeriSign and the broader markets. While '08 will be remembered as an extremely challenging year, we made good progress on our strategy of focusing the company around our core businesses. Brian, will discuss some of the financial metrics in more detail, but we're pleased with our revenue growth and operating margin improvements. Full year core revenue grew 20% year-over-year and operating margins exited the year above 35%, even as we have additional divestures and shared cost reductions to be completed. In an environment, which could be described as challenging at best, we were also able to sell seven non-core businesses and our remaining interest in the Jamba joint venture since late in 2007 netting proceeds of approximately $300 million. Through the sale of these non-core businesses, as well as disciplined operating management, our headcount ended the year with nearly 1,000 fewer employees or 23% lower than Q4 2007. And finally, over the course of the year, we repurchased approximately $39 million shares of common stock, slightly more than the $38 million shares we purchased in 2007. To date, we have reduced the shares outstanding by more than 31% since the first half of 2007, when we resumed the share repurchase program. In summary, while 2008 was a challenging year, it also marked the year of very good progress for VeriSign. I would now like to comment on some areas that we believe are of interest to investors, including, how the current economic environment is effecting our core businesses and an update on our divesture activities. Over the last 90 days we've been observing spread of the financial crisis into the broader economy and we're constantly assessing how VeriSign is being affected. I want to be clear and acknowledge the obvious. Our business along with virtually every other business is being affected by broader market condition. The divesture process has been slowed, mainstream adoption of EV certificates has been pushed out and we've noticed effects to our Naming and SSL businesses, which I'll discuss in a moment. In helping investors better understand how the changing markets could affect VeriSign, I would like to share some insight on what we see as being risks and opportunities. While we do not see each and every risk materializing into reality, we do recognize that given the current environment, investors won't understand the range of possibilities. Before discussing what we see as some of the general risks, I would like to comment on what we see as opportunities. First, our strategy remains unchanged as we're focusing the company to grow our core businesses and we are exiting a number of good, but non-strategic businesses. We believe that our strategy, along with a focus on improving our capital structure, will provide for better shareholder value over time. Our core businesses are continuing to grow with revenue growth of 16% year-over-year this quarter. Operating margins improved dramatically during 2008 to current levels at above 35%. The balance sheet is strong with nearly $800 million in cash at the end of '08. We have a proven ability to generate positive cash flow with cash flow from operations of approximately $115 million in this quarter. And we remain committed to shareholder value having repurchased more shares in '08 than we did in '07. We recognize these are difficult times, and while many companies will struggle to weather the downturn, we expect to strengthen our competitive position. We will be aggressive and we will leverage our financial strength to compete vigorously in core markets, particularly, those markets where IT spending maybe declining in 2009. We also expect that we will make investments to simulate growth in our core businesses and adjacent markets. Let me be clear that I'm not signaling a return of active M&A as a means to bring growth. Likewise, I'm not suggesting these investments have any serious or detrimental effects to our commitment to improving operating margins. In the past, we have discussed both marginal investments and close to further growth in our core businesses. This is what I'm talking about. In summary, we continue to believe that the strength of our balance sheet and consistent cash flow should allow us to continue investing in our core and adjacent markets. Not all companies are in the same position of strength, including some of our competitors, and they are being forced to cut people and investments just to survive. As a result, we believe we're in a position to do what others cannot do, especially, should we see an extended downturn. Moving now to a discussion of areas which we see as potential risks. As we've previously said, the weakening economy continues to affect the divesture process as well as having some effect on EV adoption. With the further weakening of the economy, it should come as no surprise that we continue to feel these effects. Looking further into our core businesses during the fourth quarter, we also saw some effects to the traditional main portion of our Naming business as mentioned earlier. Also, the online advertising portion of the Naming business, which accounts for 7% of the adjusted zone, is seeing pronounced weakness due in part to weakening EPC trends, including Google's AdSense program, change and lower spending trends in internet advertising. Our Naming business also has opportunities, which we're continuing to develop, including the extension of .com and .net to international markets such as India, China and Latin America. Returning to our SSL business; the main effect's of the economic slowdown, slowing of EV adoption, and a shift in buying patterns by large customers, which I discussed earlier. While there is some risk around the uptake of EV certificates, we believe that mainstream adoption is just a matter of time, as customer feedback has been consistent and clear about the benefits of EV certificates. One area of risk that we believe is given too much credit is whether we're seeing any signs of cannibalization to our VeriSign branded certificates in light of the declining AUR. To address this directly: currently we're not seeing any signs of cannibalization, while we continue to see a strong growth at the low end of the market. GeoTrust growth in particular has been very strong. However, GeoTrust units are sold at lower price points and this has the effect of causing the AURs to decline. We continue to see installed base growth in all brands with GeoTrust growing the fastest and VeriSign the slowest. Because of our market share and leadership at the high end of the market, our unit growth at the high end is somewhat bounded by the overall segment growth. In the mid and low end segments, where our market share is not as strong, we see good growth opportunities as these markets are growing faster than the high end markets and also leave room for market share gains. In sum, these factors suggest we will likely see continued AUR declines, however we expect to see continued revenue growth stemming from organic unit growth and growth opportunities for all certificate brands in international markets. In summary, while it's difficult to know with certainty how the current deteriorating economic conditions will effect our core businesses on an absolute basis, I feel very good about the opportunities we have, as well as our performance on a relative basis. Before discussing our ongoing divesture efforts, I would like to briefly comment on our recently announced arrangement agreement to acquire Certicom. As the situation is still evolving, there isn't anything we can say other than to acknowledge that we're aware of Certicom's determination that RIMs offer is a superior proposal. At this time we're considering what actions, if any, we might take, for today, we've no comments this matter. We remain committed to the strategy of focusing the company on our core businesses including the divesture of 12 non-core businesses, which we began in late 2007. As in past quarters, we continue to feel the effect of the economy on a divesture effort. While there continues to be good interest in the remaining businesses being divested, the sale process is taking longer and proving to be more complicated than we originally anticipated as buyers are taking more conservative postures, credit market issues are making it difficult to bring deals to closure. The good news is that we have now sold seven smaller businesses plus the remaining interest of the Jamba joint venture. Since our last earnings conference call, we've sold three additional businesses including post paid billing, communications consulting, and the 3united portion of the messaging business. In aggregate, since beginning the process late in '07, we've now received net proceeds of approximately $300 million from these sales and the sale of our interest in the Jamba joint venture. At this time, we have five businesses remaining for sale, including communications, enterprise security, messaging, and two small businesses, one of which we expect will close shortly. While it's certainly a challenging market in which to sell business we continue to actively work with potential buyers. With that in mind, Mark and I would like to reaffirm for you all our belief that our strategy to divest non-core businesses and focus on core businesses built on internet infrastructure services is the right course of action. We will keep going until we've completed all the restructuring we setout to do, including the divesture of all of the non-core businesses, and reducing shared services cost to fit the new smaller size of the company. As Brian will discuss later, our disciplined management of non-core businesses again led to solid operating performance. We will continue to maintain our disciplined management approach through the current transition and beyond. As we said most of last year, 2008 was going to be a very interesting year with a lot of moving parts. This is certainly proven to be true even in ways we could not have predicted. While we may not have achieved all of our goals in 2008, I'm extremely proud of our employees who made every effort possible so that we were able to make the good progress that we have. Looking ahead into 2009, we're realistic about the challenges that lie ahead and we have no illusions. We expect the coming year will bring an extended and deepening economic downturn. We expect that 2009 will bring new surprises just as 2008 did, and we're preparing for the challenging year ahead. We'll continue to focus as we protect and grow our core businesses, work diligently towards the sale of non-core businesses, right size our business once the divestitures are complete, and we have the right people in place to do all of these things. I would now like to turn the call over to Brian who will discuss the financial results for the fourth quarter and provide limited guidance before we move to the Q&A portion of the call. Brian?

Thanks, Jim and welcome back Mark. Thanks to everyone for joining us this afternoon. Before discussing our results for the fourth quarter, I'd like to take this opportunity to highlight some of our accomplishments in 2008. For the year, core revenue was $936 million, up 20% from 2007. Non-GAAP core operating margin for the full year was 33.6%, and we exited the year above 35% as we previously guided. Non-GAAP core earnings per share for the year was $0.96. Cash flow from operations was approximately $475 million and solid throughout the year. As Jim mentioned earlier, since late 2007, we have now sold 7 of 12 non-core businesses as well as our interest in the Jamba joint venture, which generated approximately $300 million in proceeds. And finally, we repurchased approximately 39 million shares of common stock in 2008, even more than we repurchased in 2007. Since resuming our share repurchase efforts in 2007, we've now reduced the common shares outstanding by 31%. At this juncture, we now moved all of the businesses that we intend to divest into discontinued operations. Our prepaid billing business is now the only business remaining in non-core continuing operations, and as previously indicated, we expect this will be wound down in 2009. On a housekeeping note, we have not fully completed the tax provision calculation process, and as a result, our GAAP tax provision for the fourth quarter and full year is still preliminary, and therefore, GAAP net income and GAAP earnings per share are also preliminary. Our final tax provision; GAAP net income and GAAP earnings per share will be updated in our annual report on Form 10-K, and may differ materially from the amounts indicated in the press release. Also, we had a couple of issues affecting our core revenue this quarter as well as prior periods. The first issue related to revenue recognition for domain names and SSL certificates for the first month of new units. Historically, we recognize a full month of revenue, irrespective of which day in the month the name was registered. We have now adopted a mid-month convention and applied it retrospectively, resulting in adjustments for both Q4 and prior periods. The second issue related to revenue recognition for SSL certificate renewals, where we were previously recognized in revenue upon the execution of the extension agreement instead of upon the commencement of the renewal period. As a result, adjustment entries were made for both Q4 and prior periods. In summary, these two issues resulted in Q4 revenue being reduced by slightly more than $1 million, and the full year effect was a reduction of approximately $5.7 million in revenue. Both issues effect multi-year periods, and as a result, prior year revenue amounts will also be adjusted downward. A full disclosure of prior-period adjustments will be made in our 10-K. Cumulatively, the balance sheet effect is a $41 million increase to deferred revenue at December 31, 2008. Turning now to the fourth quarter, given the context of the greater macroeconomic environment and its impact on the business as Jim discussed earlier, I'm pleased to report we had a solid quarter due in part to the continued disciplined expense management. As a result, we were able to achieve our operating margin milestones without completing the divesture process and in spite of the declining market conditions Moving now to more detailed discussion of our results for our core business. Revenue for our core business came in near the high end of our guidance at $245 million, up 3% sequentially and up 16% year-over-year, in spite of the revenue adjustment discussed earlier. Growth was largely driven by performance in naming, which was up 23% year-over-year. SSL and IAS were up 9% and 14% year-over-year respectively. Turning to operating margins. As noted previously, we exited Q4 with a non-GAAP core operating margin above 35% inline with our guidance. Below the operating income line, we incurred a non-GAAP loss of approximately $8 million, slightly more of a net loss than we expected due to lower interest income. Non-GAAP core net income for the fourth quarter was $54 million, resulting in non-GAAP earnings per share of $0.28. The diluted share count used in EPS calculations was 194 million shares, down from approximately 196 million shares last quarter. Due primarily to the share repurchases of approximately 2.6 million shares. Moving onto the cash flow and balance sheet items. Both, consolidated operating cash flow and free cash flow, were strong this quarter; coming in at approximately $115 million and approximately $90 million respectively. There were multiple drivers this quarter, including continuing strength in our core businesses and favorable working capital trends. Consolidated capital expenditures this quarter were $25 million as we continued to work on primarily core projects including the hardening and expansion of our data center facilities. Our ability to consistently generate solid operating cash flows resulted in our maintaining a strong balance sheet, with ending cash and cash equivalents of $791 million, up approximately $137 million from last quarter due largely to proceeds received from the divestures, including our interest in the Jamba joint venture. Please note that at the end of 2008, approximately $150 million of funds held by the reserve and discussed last quarter, were reclassified to other current assets this quarter, and are not currently included in our cash and cash equivalents. Of this $150 million, we received approximately $86 million subsequent to the end of the quarter. In Q4, we repurchased approximately 2.6 million shares for $50 million. Over the course of 2008, we repurchased approximately 39 million shares for an aggregate value of $1.3 billion. Our 2008 share repurchases exceeded those of 2007, and since resuming our share repurchases program in the first half of 2007, we have reduced the common shares outstanding by 31%. Net DSO for the fourth quarter was 35 days, consistent with last quarter. Deferred revenue from continuing operations ended the quarter at $845 million, up $8 million or 1% from last quarter. We ended the quarter with approximately 3,300 employees, down 350 from last quarter, largely due to planed headcount reductions and divestitures. As previously discussed, we would expect headcount to continue to decline with sale of non-core businesses and further reductions in shared services headcount. In summary, we're pleased with our results given the challenging economic environment. Revenue, non-GAAP operating margins and EPS were all above or inline with consensus and street estimates, and as well we'll discuss in a moment, our outlook is something that we believe most companies would be hard pressed to deliver on in 2009. Double-digit revenue growth in non-GAAP operating margins in excess of 35%. 2009 will be challenging, but we're continuing to exercise financial and operational discipline to deliver results. Moving now, to guidance. This quarter we will again provide guidance for our core businesses, which are naming and authentication. Authentication is SSL and IAS as we align to a BU structure. And as a reminder, our guidance includes VeriSign Japan, given its focus on authentication services. Consistent with prior quarters, we are providing guidance one quarter at a time given the uncertainties with regard to the timing of the remaining divestitures. That being said, last quarter we provide a high level guidance around 2009 revenue growth, suggesting we would see double-digit revenue growth. Based on market conditions as we discussed, we now expect that 2009 growth will be at the low-end of the prior range. Before providing detailed guidance for the first quarter, I would like to call out an important change to our non-GAAP reporting as beginning in Q1. We intend to reduce the list of items excluded from our non-GAAP financial information. As an example, previously, we would exclude gains and losses from derivatives and equity investments. Going forward, these gains or losses will be included in our non-GAAP results. We're making these changes in an effort to improve the quality of our earnings, but we also recognize that these changes could cause some confusion when comparing results from year-to-year. As a result, the GAAP and non-GAAP reconciliations included in our Investor Relation's website will reflect adjusted non-GAAP results for prior periods to reflect these changes. Over the course of 2008, these changes impacted non-GAAP earnings per share about $0.04 higher. However, the results did vary quarter-to-quarter. This change won't materially impact our results going forward. Moving now to more detailed guidance for the first quarter of 2009; for Q1 we expect revenue for the core businesses will be in the range of $246 million to $251 million or flat to up 2% sequentially. We expect that the Q1 non-GAAP operating margin will be approximately 35%. We also expect that aggregate of items below the operating income line will continue to be similar to this quarter's results. We now expect that the first quarter fully diluted share count will be approximately 194 million shares. Finally, we would expect non-GAAP earnings per share to be consistent with this quarter. In summary, we are pleased with our performance in the fourth quarter and fiscal year 2008 and entering into 2009 we remain focused on executing our strategy as we clearly see this is the key to further unlocking shareholder value longer term. We would now like to open the call for your questions. Operator?

(Operator Instructions). And we'll go first to Todd Raker with Deutsche Bank. Todd Raker - Deutsche Bank: Hey, guys two questions, First, on the DNS side of the business, as we anniversary the Google AdSense changes, should we expect some of the drag in the online advertising business to lift?

Todd, it’s Jim, let me reiterate what we've told you before, that hasn't changed. So basically when the changes in the Google AdSense program were made initiated, essentially at the beginning of July in 2008. We estimated that the number of, so called, advertising names in the zone were about 8 million and we estimated that roughly half of those, about 4 million, would essentially be washed out by that program. Based on the methods that we use to identify those advertising names in the zone, we standby those numbers, we did say, and we still believe that, first of all, we know that the non-renewals of those names, as they get flushed through the system over the fourth quarter period, is lumpy, its not smooth, and that Q1 is probably going to be the lowest of the four quarters, with respect to those names. So, we're still tracking that. There are other variables obviously, that affect the zone, normal names as well, but for advertising names specifically, the advertising names that we believe were affected by the Google AdSense program; that's the way it still looks to us. Todd Raker - Deutsche Bank: Okay. And then my second question in terms of operating margins you guys showed very nice improvement last year, even without divesting any of the larger businesses. With the 35% plus guidance this year, you're basically modeling flat operating margins. Should we assume that shared services or margin improvement is totally dependent now on the divestures or is there an opportunity here to take the core business to a more profitable level without the divestures?

Well, Todd, this is Jim, again. I'll let Brian give you a more detailed answer, but let me give you an overview, higher level answer. One of the things that we did around the third quarter of last year is we sort of realigned along business units. There are many benefits associated with that realignment, as opposed to a restructuring; its realignment. And some of the benefits, besides giving us better focus in the core businesses, is that it allowed us to begin identifying those shared services costs that are uniquely associated with one of the business units and move them in. Specifically, we did that so that we could, in fact, get ahead of it in that prior to completing the divestiture process. So, the big picture is that, I think we did some things that positioned us to identify and start optimizing shared services prior to actually getting the divestures complete. There is a lot of other heavy listing that goes on in our financial planning. I'll let Brian talk about.

Yeah. That's right, Jim. Hey, Todd, this is Brian. As Jim alluded to, we did do a divide and focus strategy where we broke out the divest business and then operating them on a standalone basis. That enabled us to hit our operating margin a quarter early, despite not completing the divestitures. As we gave you updated guidance for the end of the year as a lower part of the range. We aren't reducing our margin profile. So we're continuing to take cost out of the business to hit that. On the shared services side, the remaining cost that we talked about last time that will be to reach once the divestitures are completed are mostly in the data center, but most of the various costs around the company that you're alluding to; we've aggressively taken those out over the last couple of quarters. Todd Raker - Deutsche Bank: Why won't we see operating margins improve as pricing rolls into the DNS side of the business?

Why wouldn't you see operating margins improve, you’ll see pricing roll into the DNS. Todd Raker - Deutsche Bank: Yes. As the price increases actually started flowing through the P&L, why don't your margins try and expand?

Yes. You actually got a mix on revenue, because you have revenue shifting down and then, we're also investing heavily into our infrastructure and the security of the business, and so you know that we invested a lot of money into Titan, where you got a new data center rolling on the last time I talked about our ITN fees going up. There are a lot of one-time fees that we didn't have in 2008 that we're going to have in 2009. In order to achieve those margins we're continuing taking costs out of the business to stay at 35%. Todd Raker - Deutsche Bank: Okay. Thanks, guys.

Thank you, we'll go next to Sterling Auty with JPMorgan. Sterling Auty - JPMorgan: Yes. Thanks. I just want to clarify your comment about the 2009 growth, and updating what you said last quarter; I think last quarter you said growth in '09 would be less than '08, but still be double-digits. Is that what you're still saying or you're just saying that its closer to the low end of the double-digit meaning closer to the 10% than something higher?

I think we're saying both the things you just said.

That's correct, Sterling. Sterling Auty - JP Morgan: Okay. On the gross margins in the quarter, looking at the gross margins both sequentially and the trend line, was there impact there because of the AUR and SSL or just give us more color as to what happened in the gross margins for the quarter?

Yes. Great question, Sterling. This is Brian. We had a short-term SOW, where we actually incurred $4 million of cost of revenue greater than previous quarters, which actually impacted our growth margins. Additionally, the data center coming online increased by about $1 million, and then there was some FX exchange relative to our VeriSign's Japan subsidiary. Sterling Auty - JP Morgan: Okay. And the last question, I wasn't clear. Jim, as you're talking about the divestures, I just want to make sure I understand. As you think about the three bundles that were there and looking at the announcement from today on the 3United. Are you now saying that you're willing to kind of breakup those bundles to get the divestures done and behind you rather than kind of doing the three big bundle type of sale strategy that you had before?

Well, Sterling, I wouldn't go as far as to say it was our intention to demonstrate or send a message that we're willing to do that. I think it does say, however, that we are willing to be flexible that we're very determined and I'm personally very focused as is Mark, as is Brian on getting the divestures done. If it makes sense and it doesn't affect the integrity of the bundle, in fact, as Mark was involved in designing it, as was myself and some other folks about a year and a half ago. That was a carefully designed bundle to maintain a certain amount of integrity and sort of sensible approach to the market. So to the extent that it doesn't negatively impact that design, I am sure, I think we would be willing to do those sorts of things, in order to move some of these businesses and the associated expense.

Sterling this is Brain. On top of that, I think, it just shows the commitment to our strategy to move forward with the divestures. Sterling Auty - JP Morgan: All right, great. Thank you.

Thank you, we'll go next to Phil Winslow with Credit Suisse. Phil Winslow - Credit Suisse: Hi, guys. Just want to touch on the SSL business. I think you mentioned that you could potentially see revenue get into the single-digit range. Just wondering, if you could discuss what your sort of expectation is for, maybe, growth in that base, but then also, just ASPs going forward.

Well, let me tell you. In the same quarter last year we were talking about 13% unit growth and 9% revenue growth. So in a sense our revenue growth is single-digit technically. I think we're seeing in that business, pretty much what we described and we're not really reading anything more into the numbers. We are the largest market shareholder in the high-end. We are the largest owner of revenue in that market. The room that we have to grow is in the lower-end of the market and we see that with the much higher growth rate associated with GeoTrust Certificate. So I think for that reason, as we continue to gain market share at low-end. I think you can expect to see the AURs drop. And we're talking about barely over 1% as, for example, a drop of $251 to $248 this quarter. Pretty consistent with I believe a $3 drop that we had last in the prior quarter. So those numbers, to us are not surprising at all. They're entirely consistent with what see when we put the individual growth rates of the various brands under a magnifying glass. So we see the market growing and I think it's generally the macroeconomic conditions that are causing people to sort of be more careful, more growth on the low end, a little bit of slowing of EV adoption. I think there is really not much more to it then those things that we observe.

Phil, I'd just add one another thing on that high end part of the range; that we have such a strong mark leadership position there that we're somewhat constrained in that our growth there somewhat of a function of the segment growth itself. Phil Winslow - Credit Suisse: And also, just very quickly, just on the renewal rates, obviously, you've discussed it being negatively impacted by online driven; but also just macro? In the previous cycle it got down into the 50s and even at one point touching the 40s. What’s different about this cycle than the last and where would you expect renewal rates to bottom out at?

Hi, this is Mark. I don't think we see anything near what we saw in the downturn. You said, referring to when the bubble burst, and primarily the reason for that, is back then, what we saw was the business models and the domain name business that weren't yet baked at all, so, there was a tremendous amount of name given away for free by registrars that went into the base with some wild attempts at monetization. When that didn't play out, they deleted them wholesale. So, those sorts of programs haven't existed for years here, so I don't think we would go anywhere near that at all.

If I can just add to that, too. We mentioned renewal rates basically going from 72% to 70% rounded. I think it would be fair to point out, if we just take the number of one digit to the right of the decimal point, 72 was 71.6 rounded up, and 70 was 70.4 rounded down. So, if the difference appears to be two full percentage points it's actually roughly 1.2. Phil Winslow - Credit Suisse: Great. Thanks, guys.

Thank you. Next we'll go to Sarah Friar with Goldman Sachs. Sarah Friar - Goldman Sachs: Good afternoon, everyone. Just a question on the slowing in the new name ads. How does that impact your decision on price increases; and does that, with the current tough time that we're in, mean there is less inelasticity of demand?

Yeah. Hi, Sarah. This is Mark I’ll take that one. Sarah Friar - Goldman Sachs: Hi Mark.

Good to talk to you again. We view these things as just completely separate. They are not related, so, from a price increase standpoint, as you know, we have the right to raise prices under the contract and we take a look at that on a one at a time basis at the appropriate time. And we take into account the market conditions around that, primarily related to whether those price increases would have a negative impact on our business either from number the names coming into the system or for other reasons that are broader in the community. So, we will take a look at that one at a time and, as far as the impact from that, we hadn't seen an impact in the past from a price increase standpoint in the number of new units coming in today. So I am not sure that that would change in the future. Sarah Friar - Goldman Sachs: Sure. Makes sense. Good to have you back as well. Just on the gross margin side benefits, if I could come back just to your comment on that one-off, or kind of temporary impact, of $4 million. Does that fade next quarter, so we go back to gross margins to something more like 78% or does it effectively have an impact through 2009 and kind of fades through the year?

There was a three quarter project that started in 3Q, 4Q was the highest and it will roll-off in Q1. When we gave our guidance before, it was baked into our numbers, and as we gave our guidance it's baked into our 1Q numbers as well. Sarah Friar - Goldman Sachs: Okay. So that 35% operating margin effectively probably still has a hit of maybe a 100 bps on the gross margin side. Is that the way think about it?

That would be correct. Sarah Friar - Goldman Sachs: Okay. Great. Thanks very much.

Thank you. Next we'll go to Rob Owens with Pacific Crest Securities. Rob Owens - Pacific Crest Securities: Hi. Good afternoon everyone. On the SSL side of the business, can you give us a sense of the renewal rate is or how that's been tracking?

This is Mark. Hi, Rob. Rob Owens - Pacific Crest Securities: Hi.

On the renewal rates side of the business, we're seeing a slowdown in renewals just like we would see in our naming business, but I think that's no different from the total market we're living in right now. Rob Owens - Pacific Crest Securities: Any sense of what the magnitude is, Mark, or just where you guys are?

A 50% to 60% kind of range, Rob. Rob Owens - Pacific Crest Securities: I'm sorry, Ken?

A 50 percent to 60 percent kind of range. Rob Owens - Pacific Crest Securities: Is what the renewal rate is?

Yeah. Rob Owens - Pacific Crest Securities: Okay. And then what's the average life you're seeing right now and how does that compare to the last couple of quarters?

Really, it hasn't changed too much on the average life. Certificates, are right in the range of 16 months, or right above there. It moves a little, like fraction, in a month, but its right around 16. Rob Owens - Pacific Crest Securities: Okay. Great. Thank you.

Thank you. We'll take our next question from Walter Pritchard with Cowen and Company. Ken Long - Cowen and Company: Hi guys. This is Ken Long for Walter. Kind of back on the SSL, with AUR going down, is there anything outside of mix that's driving that down, perhaps some pricing pressure from your customers?

This is Jim. No. Not that we can see at all. In fact, if you look across the brand, there is actually growth in each of the components and at each segment of the market. It's literally just simply the fact that GeoTrust component is growing much faster than the others. So, there is not a slowdown anywhere, and again, the low end is where we don't have the strong market share that we have in the high end. So, there are some competitive pressures out there but the segments are growing and GeoTrust is growing faster. That, I believe, is the sole reason that we can identify that the AURs declined at roughly 1% per quarter that we are seeing in the last couple of quarters. Ken Long - Cowen and Company: And then, I guess, with the low end being, sort of, the fastest growing sector, I mean, you got guys like Go Daddy out there selling them for pretty cheap. Is there anything you guys are doing to try to get a bigger share of the market?

We continue to compete with the brands in the lower end of market as well. You know, we have our blanket brands out that are doing very, very well even on a relative basis to lower end brands of the market.

I have seen some surveys that say that the low end of the market is growing faster and that competitors are gaining, but, I think some of those surveys you have to be careful about some of the data that comes out of them. Most of them look at public-facing certificates not certificates behind the firewall. There is a huge difference there. Ken Long - Cowen and Company: Yeah, of course. Okay, great. Thanks guys. Thank you.

(Operator Instructions). We'll go next to Steve Ashley with Robert W. Baird. Steve Ashley - Robert W. Baird: Hi, onto the domain name side; I would just like to get some color on your decision to no longer break out the online names. It seems that you benefit by segregating it. You can see that your traditional business grow maybe 16% in units in this recent quarter if you would take the drag off, I was just wondering what some of the thinking is behind that?

Just as a percentage of the base? This is Mark, sorry. Just a percentage of the base, looking at about 7% today, and that will be certainly sub 5%, we believe, by mid-year and maybe even lower after that. So, it's just not a significant portion of the business. If that changed, we would be back to talking about it, but there is really no reason to deal with those kinds of numbers. Steve Ashley - Robert W. Baird: Brian, a couple of questions for you. Cash flow from operations has been running about $100 million a quarter. Is that still a reasonable expectation for us in 2009? And can you offer any insight into what capital expenditures might be in 2009? Thanks.

Yes, this is Brian. Cash flow from operations, $100 million, a little north of a $100 million, I would say, and then from a capital perspective what we said before, it's still consistent with about 8% to 10% of revenue. Steve Ashley - Robert W. Baird: Thank you.

Thank you. We'll go next to Katherine Egbert with Jefferies. Katherine Egbert - Jefferies: Hi. Good afternoon. I think you gave some color on domain name growth and the adjusted zone for March. How can you be sure that won't be down; that domain names won't be down quarter-on-quarter? What gives that comfort?

Hi, this is Mark. A mix of things. The base itself generally consists of two things. One, is the number of new names coming in the system, and then the second, is the renewal rate of the names in the system itself. So, when we look at the analysis on both of those from a new name perspective, what our data would show us is Q1 being the strongest quarter generally in the year, plus the renewal rates, given what we said earlier, in the 70%, plus or minus two percent points on the high side of that. You take and mix that math and it looks like the base would not be going backwards. Katherine Egbert - Jefferies: Okay, fair enough. And then on the divestures; are there any financing issues or lack of interest because it seems like if there aren't, and you said in the past it hasn't been the case, isn't it just a question of you guys accepting a lower price and just kind of being done with it?

Well, that's certainly a component. I don't think it's quite as simple as you make it out. We've had strategic buyers for whom the businesses make a lot of sense. In one case, in the case of one bundle, we have a buyer engaged. The sole issue there is financing. There's been progress at a snail's pace and I think that's just simply a function of the economy. The credit markets are frozen and it's really very difficult; very few deals are getting done. So that's one example. In other cases, we have buyers, we are engaged. There are some discussions about price. Let me put it this way, if price were the only issue, I think we would have sold these businesses by now. We are moving slower. We're revisiting the process with the sort of strategy of how we're approaching selling and divest business and we're exploring some new ideas, but our commitment to move the businesses out hasn't changed, and I'm reaffirming that commitment now that we will sell those businesses. Katherine Egbert - Jefferies: Okay. Thanks, Jim.

Thank you. We'll go next to Garrett Bekker of Bank of America-Merrill Lynch. Garrett Bekker - Bank of America-Merrill Lynch: Hi, good afternoon, Jim, you had talked about some new services in the past around the DNS business, so, just wondering if you could give us an update on the status of those and where you're at with that?

Sure. We actually rolled out into beta something called VIDN, VeriSign Internet Defense Network. This is something we talked about several times that is of particular interest to large organizations, registrars, others who occupy certain issues in the operation of the internet. This is where, essentially, we can use the expertise that we've developed in understanding how attacks are mounted against our network and to share that expertise and provide that capability to others who operate in an environment where uptime is important, obviously, financial institutions and other folks, who provide online services. So, there's I think a very good example. We've talked also about data analytics. That's something that we're looking at and working on. Part of the benefit of having Mark come back, after having been with the company for a while, is that a lot of those projects that didn't get funded because resources were going more towards acquisitions at the time, we are reviewing a number of those. We have opportunities that we're looking at. We continue to invest in project Titan, as well, obviously. But I point out VIDN is something that's out of the door now in beta, physically at customers, very good response, totally new offering. Simply a result of the fact that a lot of what VeriSign does cannot be supported by off-the-shelf products for the enterprise and we have to develop it ourselves and that, of course, creates opportunities that we can leverage and that's the best example I can give you. Garrett Bekker - Bank of America-Merrill Lynch: Thanks, that's helpful. Maybe just one follow-up on the SSL side as well. Apparently there is a security issue related to the MD5 hashing algorithm on the RapidSSL search. Just maybe could you speak to that a little bit, and did that have any impact to the SSL business in 4Q?

Now, going backwards, the answer is no. It didn't have any impact on the business that was not unknown and anticipated. We actually were well on top of that. For those out there who don't know, MD5 is a component algorithm that is part of the algorithm suite that's employed to produce a thing called a digital signature. All of these algorithms were developed primarily by RSA, a company that ran in the 80's and 90's, and we knew that MD5 was basically getting long in its shoes. We were well into a process of basically updating the systems and moving beyond it, and so, we were actually on top of it when the researchers who we know very well and know exactly what they were doing, they exploited one small known weakness and, basically, developed a way by which they could sort of crack one digital signature by getting a huge computing resource to work for several months all at once. And so, long before this was ever turned into anything that could be exploited, we'd essentially rendered the issue moot by replacing the systems in the field. We were ahead of that one. Garrett Bekker - Bank of America-Merrill Lynch: Okay. And what's the process for customers who had some of those certificates to maybe switchover?

We issue new certificates to them. Garrett Bekker - Bank of America-Merrill Lynch: Okay. Thanks very much.

Sure.

Thank you, we'll take our next question from Rob Sanderson with Broadpoint.AmTech. Rob Sanderson - Broadpoint.AmTech: Yeah, thank you. Lots of the questions have been answered. Thanks for that. One question that we haven't talked about is your appetite for share re-purchase. I think you left the last quarter with around 950 million remaining on an authorization, picked up a couple of million here this quarter. But what's the current thinking on share re-purchase given the blooming macro environment that you're describing?

I think, like everybody else has done, we're taking a cautious view. We think that our balance sheet is one of our great assets as I mentioned in the prepared remarks earlier. I think it's just one of our great strengths that, while some companies, many companies, are struggling to survive, taking desperate measures in order to do that, they have no capital with which to grow or invest and we have quite a bit of it. So certainly in a market condition where cash is king, we want to be cautious about that, but I also want to underscore our commitment to returning shareholder value in a way that makes the most sense. I think, as you pointed out, the fact that we were buying back in Q4, I think, speaks volumes about that. I don't know what the statistics are, but I would venture to guess that not too many companies were buying their shares back in Q4, but we're still committed to returning shareholder values in the best way. Just given the environment, we are more cautious and certainly want to make sure that's the best use of our cash. Rob Sanderson - Broadpoint.AmTech: Is it fair to think that as you progress through the year and, at some point hopefully, we start to see a light at end of the tunnel, can we expect you to start becoming more aggressive? If you could just sort of frame the shape of a macro recovery?

Well, I don't think I want to speculate about what we'll do when and if things turn better this year, certainly the forecast I've seen and the comments I've seen and economists seem to indicate that most people, the consensus seems to be that we, haven't hit the bottom yet and we're not likely to get our way out of this year, but I would love to be wrong about that. I don't want to speculate about what we'll do differently, we're certainly well positioned. We did end the year with over $800 million in cash. We actually crossed over $1 billion just recently. So, again I think, that that sort of strength in the balance sheet is a tremendous asset, especially, as I said, if this downturn becomes an extended one. If this continues well into 2010, I think that the debt cash is going to be a powerful asset, a powerful weapon for us. We can continue to invest in growth. We can continue to pursue these new opportunities in the core adjacencies. We don't have to raise a penny to do it. We can do pretty much everything we wanted to do, that we set out to do. We talked about achieving operating margin goals, et cetera. We have been able to do that without even completing the divestures. So, I'm just reluctant to say what we would do if everything turned around and we sold the divest companies and we were in a different position. Certainly we'd have a wonderful range of options to choose from then, but we earn without options today. Rob Sanderson - Broadpoint.AmTech: All right. Thank you very much.

Thank you. And, we'll take our final question from Fred Ziegel with Mackinac Research. Fred Ziegel - Mackinac Research: Hi, everybody. Jim, I guess a framework question around the PKI WiMAX opportunity. How do you think about that or how should we think about that. I know it's obviously a very early on market, but what do you think the opportunity is there?

I'm glad you asked that question. I'm actually excited and proud of the fact we were selected to provide CA services to that community. Long ago when this company was founded, the idea, the vision, was to build a company that provided trusted third party services, that as people started to set up networks, intranets, ad hoc networks, specialized networks, public networks, where security would be crucially important, and here wireless, obviously, is an excellent example of that, that they would basically come to the logical choice, which is a trusted third party, whose existence depends on its ability to successfully operate a CA in a very trusted, capable way. And, I think our long history of having done that for 14 years, of having operated the security infrastructure for e-commerce, for example, very successfully, is probably something that weighed very heavily in their decision to do it. So, I hope that this is the beginning of other operations and other projects that start to secure the broad public network. The internet, its components and parts of it and when those people realize that they need certificate services and they need certificate authority to provide them, that's what we're here for. So, I'm really encouraged and excited about it. Fred Ziegel - Mackinac Research: So, in terms of WiMAX specifically, would you be partnering with people like Clearwire and the DeviceGuys or is it something that a WiMAX customer would load separately. And, I guess the second question is, to the extent that there's an Obama broadband initiative, how do you think you plan that?

Well maybe I can just offer up a short example. So, back in the 90’s, in the early 90’s, around 1993 and 1994. We worked with a number of set-top manufacturers to develop a standard or, so called, key management. They wanted to secure the content that they delivered. In fact, a lot of people have a set-top box on top of their TV today that allows them to receive content and other services that's secured. That protects everyone, it protects the content providers; it protects the service provider. In a very similar way WiMAX, I think, will. That was a model for WiMAX. So the user doesn't see it. It's really transparent. Security succeeds when it's transparent, absolutely secure and the user doesn't even see the costs. It's built into the systems they're receiving. So, I think of that as a model, and again, I think VeriSign is the company that has the means, the network, the experience, the trust as a third party to these various vendors. So, WiMAX is just an example of a standard that develops, that requires, the use of encryption. You have got to manage the keys; you've got to manage trust and integrity in that network. And we're just basically a service provider who is invisible to the end user, but we provide a critical component. It couldn't work without somebody playing that role.

Thank you and with that I would like to turn the program back over to Mr. Ken Bond for any additional or closing comments.

Thank you, operator. We anticipate our next quarterly conference call, which will reflect our first quarter 2009 results, will be held on Thursday, May 7th at 2 PM. Pacific time. We expect to provide final confirmation of this date on April 1st, the first business day after the close of quarter. I would also like to remind you that in light of regulation; FD, VeriSign plans to retain its long standing policy to not comment on its financial guidance during the quarter unless it is done through a public disclosure. Please call the Investor Relations department with any follow-up questions. Thank you for your participation and continued support. This concludes our call. Thank you and Good evening.

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