Mark McLaughlin - Chief Executive Officer, President and Director James Bidzos - Chairman David Atchley - Brian Robins - Chief Financial Officer, Principal Accounting Officer and Executive Vice President

Sterling Auty - JP Morgan Chase & Co Daniel Cummins - ThinkEquity LLC Philip Winslow - Crédit Suisse AG Edward Maguire - Credit Agricole Securities (USA) Inc. Walter Pritchard - Citigroup Inc Steven Ashley - Robert W. Baird & Co. Incorporated Kash Rangan - BofA Merrill Lynch Gregg Moskowitz - Cowen and Company, LLC

Good day, and welcome to the VeriSign Second Quarter 2011 Earnings Conference Call. As a reminder, today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. David Atchley. Please go ahead, sir.

Thank you, operator. Good afternoon, everyone, and thank you for joining us for VeriSign's Second Quarter 2011 Earnings Conference Call. I'm David Atchley, Corporate Treasurer and Director of Investor Relations, and I'm here today with Jim Bidzos, Executive Chairman and Chairman of the Board; Mark McLaughlin, President and CEO; and Brian Robins, Executive Vice President and CFO. Please note that this call and accompanying slide presentation are being webcast from the Investor Relations section of our new corporate website, www.verisigninc.com. Please refer to that website for important information, including the Q2 2011 earnings press release. A replay of this call will be available on the website within a few hours. Today's slide presentation will also be available for download 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 discussed in detail in our documents filed with the SEC, specifically, the most recent report on Forms 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. I would like to remind you that in light of Regulation FD, VeriSign retains its long-standing policy to not comment on financial performance or guidance during the quarter, unless it is done through a public disclosure. The financial results in today's press release and the matters we will be discussing today include non-GAAP measures used by VeriSign. GAAP to non-GAAP reconciliation information is appended to our press release and slide presentations, as applicable, each of which can be found on the Investor Relations section of our website. In a moment, Jim, Mark and Brian will provide some prepared remarks, and afterward, we will open up the call for your questions. Unauthorized recording of this conference call is not permitted. With that, I would like to turn the call over to Jim. Jim?

Thanks, David, and good afternoon, everyone. Before we discuss the quarter, let me say a few words. As you've read in our second quarter earnings press release, Mark McLaughlin will be leaving the company on August 25, and I will be reassuming the positions of President and CEO effective August 1. Mark is leaving VeriSign to become CEO of a private company. We will discuss this transition in more detail after we review our second quarter results. With that, I'll now turn the call over to Mark.

Thanks, Jim. Good afternoon, everyone. Second quarter was another quarter for VeriSign, and we continue to be pleased with the company's performance. In our Naming business, we exceeded 8 million new domain name registrations for the second consecutive quarter. In addition, through continued disciplined operations, we were able to achieve ongoing operating margin expansion. Also, our balance sheet remains healthy, which allowed us to repurchase $100 million in shares in the second quarter, leaving us with approximately $1.1 billion under the current share repurchase authorization program. Before I get into Q2 results, I want to highlight and comment on a few key events from a busy quarter. First, on May 11, we announced that VeriSign entered into a settlement agreement and mutual release with the Coalition for ICANN Transparency, or CFIT, which resolved the over 5-year long CFIT litigation. As we indicated in the press release and 8-K, under the terms of the agreement, CFIT filed a dismissal with prejudice of all claims in the litigation. Further, there was no payment associated with the dismissal, and the parties executed mutual releases from all claims now and in the future related to the litigation. As we've stated in the past, we always believe the case to be without merit. Second, on June 20, ICANN announced that its Board of Directors had approved their plan to increase the number of generic top-level domains. We view the introduction of new gTLDs as an adjacent growth opportunity. We believe that VeriSign's experienced and trusted brand should make us a logical choice to operate the registry for many organizations applying for new gTLDs. ICANN announced they will begin accepting applications for new gTLDs on January 12, 2012. On June 28, we were pleased to announce that ICANN and VeriSign had renewed VeriSign's contract to serve as the authoritative registry operator for the .net registry for another 6 years. With the steady growth of the Internet and the ever-increasing demand on the DNS, VeriSign is committed to invest in, scale and enhance our world-class infrastructure that supports .net to ensure its continued, secure, stable operation. We are proud that we have been entrusted with the continued responsibility of running .net. And lastly, by way of update in the third quarter, on July 14, we announced an increase in registry domain name fees for .com and .net per our agreements with ICANN. As of January 15, 2012, the registry fee for .com domain names will increase from $7.34 to $7.85, and the registry fee for .net domain names will increase from $4.65 to $5.11. The fee increases will have no direct impact to 2011 revenue since the increases are not effective until January 15, 2012. Continued strong global Internet usage growth, along with increasingly powerful cyber attacks, leveled against all parts of the Internet's critical infrastructure, have dramatically increased the demands on Internet infrastructure providers. The volume of DNS queries on VeriSign's global Internet infrastructure has more than doubled in the last 5 years. Future growth is expected to occur in an even faster pace. VeriSign's infrastructure has maintained 100% operational stability for more than a decade due to continued innovation and investment in the infrastructure. I'll comment now on second quarter results. At Registry Services, the base of registered names in .com and .net totaled approximately 110 million names at the end of June. This represents an 8% increase year-over-year in the base and an approximately 2% increase quarter-over-quarter. In the quarter, we added 1.95 million net names to the domain name base. In the second quarter, we processed 8.1 million new registrations, which is in approximately 2% increase year-over-year. This is the company's second largest quarter in our history for new registrations. On the renewal rate side, the Q1 2011 renewal rate was 73.8%. While renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the second quarter of 2011 will be approximately 73.5%. We expect the Q3 net names added to the base to be between 1.8 million and 2.1 million names, which reflects the continued growth in the underlying drivers of the Internet, as well as seasonality. With regard to our NIA business, we have ramped up our sales efforts, saw positive traction in the market, and again exceeded our planned bookings metrics during the second quarter. Additionally, our product roadmap of offerings and enhancements has allowed us to deliver services to the market that addresses the growing complexity of managing networks in an era of cloud computing. We believe we're well positioned for a leadership role in this fast growing but fragmented market. With the second quarter behind us, we've capped a solid first half of 2011 and look forward to updating you on our third quarter earnings call. Thanks for your attention, and I'll now turn the call over to Brian.

Thanks, Mark, and good afternoon, everyone. As Mark said, this was another solid quarter for us, and I'm pleased about the progress we have made towards our goals. Let me quickly recap our performance this quarter on our key operating metrics which are revenue, deferred revenue, non-GAAP operating margin, non-GAAP EPS growth and free cash flow, and then I'll discuss progress towards our annual guidance. Revenue of $190 million for the second quarter was up 5% from the prior quarter and up 13% year-over-year. Deferred revenue ended the quarter at $714 million, an increase of $15 million or 2% from 1Q and up 11% from the same period in 2010. Q2 non-GAAP operating expenses were $92 million, down 7% quarter-over-quarter and down 8% year-over-year. Non-GAAP operating margin for Q2 was 51.7% compared to 45.9% in Q1. Second quarter margin expansion was driven primarily by the $6 million nonrecurring accrued expense reversal taken during the quarter, which increased operating margin by 3.1%. Additionally, we realized cost savings through streamlining our business as we have completed our divestitures. We have achieved these savings in G&A support services and we realized them faster than expected. Based on the progress to date, we expect fourth quarter 2011 exit non-GAAP operating margin to be at least 48%. Non-GAAP net income for the second quarter was $65 million, resulting in non-GAAP earnings per share of $0.38 compared to $0.32 in Q1 and $0.23 in the same period in 2010. Non-GAAP earnings per share for the second quarter of 2011 includes a $6 million recurring accrued expense reversal, which increased diluted earnings by $0.02 per share. Income-related transition services, included as part of nonoperating income on the P&L, was approximately $2.3 million in the second quarter. A quick comment on taxes. We continue to believe a non-GAAP tax rate of approximately 30% is a reasonable estimate. In 2011, we expect to pay cash taxes of approximately $40 million, $28 million of which is related to the divestiture of Authentication Services. We exit Q2 with a diluted share count of 170 million shares. Dilution related to the convertible debentures was approximately 1 million shares based on the average share price during the quarter. Operating cash flow on a consolidated basis was $13 million in the second quarter, noting that the contingent interest payment totaling $100 million was paid on May 18, 2011. Free cash flow was negative $4 million in Q2, given a $3 million decrease in excess tax benefits and $14 million in capital expenditures in the quarter. We still believe capital will be approximately 10% of revenue in 2011, given anticipated facility spend related to the move of our corporate headquarters. As a quick housekeeping item, we've now included unrealized gain loss on contingent interest derivative on convertible debentures as a non-GAAP item. You will now see this item on our reconciliation statement, with first quarter showing a $250,000 loss, while Q2 showed a $700,000 gain. To sum up, we're pleased with our performance. We continue to grow non-GAAP operating income and net income. We have a healthy cash position and a strong cash flow generating capabilities of our business continue to be a key benefit of our financial model. We're pleased to report on the status of transitional Authentication Service business to Symantec and corporate functions to the East Coast. Progress has been on track with the bulk of the transition wrapped up. I would like to thank both the East Coast and West Coast employees for their hard work and dedication and making this a successful transition. As noted previously, income related to transition services in Q2 was approximately $2.3 million. We now expect approximately $2 million in the second half of the year. Let's move on to guidance, 2011 guidance. We have tightened the revenue for 2011. We'll be in the range of $765 million to $775 million or growth of 12% to 14%. We now expect non-GAAP gross margin of approximately 79%. Q4 exit non-GAAP operating margin, as mentioned earlier, is expected to be at least 48%. Non-GAAP interest expense and non-GAAP nonoperating income, net, which are previously referred to as other loss, net, is still expected to be $25 million for 2011. As I mentioned previously, capital expenditures are expected to be approximately 10% of revenue. Our guidance is based on expectations of continued growth and increased operating efficiencies in our businesses, in addition to our financial projections for interest income and expenses. I am excited about the opportunities for the company. We believe the disciplined execution opportunities that leverage our competitive advantages will provide a platform for long-term profitable growth. I'll now turn the call back to Jim. Jim?

Okay. Thanks, Brian and Mark. As I mentioned at the beginning of the call, Mark will be leaving to pursue another opportunity. Mark's departure comes at the end of a major 4-year restructuring for the company. We've gone from over 5,000 people to just over 1,000. We operate 15 offices internationally versus more than 80, 4 years ago. We divested a number of businesses, including our Authentication unit, and returned billions of dollars of our shareholders. We relocated our headquarters from California to Virginia. Throughout what was, at times, a very challenging restructuring, we maintained a perfect operational record. And in just the last 6 months, we favorably settled the long-standing CFIT lawsuit, we've renewed .net and expanded our core business with our NIA units. Mark led the company through much of this transition and his contributions to our success are significant and appreciated by the board and employees. Mark leaves VeriSign a stronger company with a stable and growing revenue base and an experienced management team that delivers network performance and reliability the world has come to expect, plus focused and disciplined financial management that continues to deliver profitability and shareholder returns. Mark?

Thanks, Jim. As Jim mentioned, I'll be leaving VeriSign at the end of August for a new opportunity that will be announced next week. This was a very difficult decision for me, given that I've been part of the VeriSign team and family for a long time, and it's such a great company. As Jim said, the team that I've had the honor of working at VeriSign has accomplished an impressive amount of work and has created a lot of value over the past few years. While I have the honor of leading the company during this time period, the credit for its accomplishments goes to the team. It has been my pleasure and privilege to work with such an outstanding team, and I'd like to take this opportunity to thank all of them for their continued hard work and friendship. Jim?

Thank you, Mark, and thanks for all you've done. We all wish you the best. Looking forward, the company is well positioned to continue growing for the remainder of this year and beyond. We'll now take your questions. [Operator Instructions]

[Operator Instructions] We'll take our first question today from Philip Winslow at Crédit Suisse. Philip Winslow - Crédit Suisse AG: Just got 2 questions here. Just first, on the margin front. Even x the $6 million onetime reversal, you guys way exceeded the consensus margins for this quarter. Brian, when you look over the sort of the course of the year and obviously you've got some transitional costs, how much more do we have in terms of these transitional costs rolling off versus sort of any incremental that we might see coming on? And then also, just in terms of use of cash. I'm wondering if you can give us a sense of what percentage of your balance sheet is in the U.S, and just how should we think about the use of cash that you have in the U.S.?

Phil, this quarter, there's -- as far as the margin side, there's a couple of things I want to touch on. As I said in my prepared remarks, we reported an operating margin of 51.7% for the second quarter, the onetime expense reversal $6 million added 3.1%. So if you adjust for this operating margin on a normalized basis, it would've been 48.6%. The increase in the second quarter was attributed to a couple of things. We had a slower ramp in new hires than anticipated, and we achieved across-the-board G&A savings. And then finally, we really completed the transition from the West Coast to the East Coast. We only have a few employees remaining on the West Coast that we're transitioning, and the last employee is being notified on August 3. So I think from a margin perspective, we've taken out most of the excess, if you will. We did increase our operating exit run rate guidance at the end of the year to, say, it'd be at least 48% from 46%, 48%. So we will continue to try to extract savings out of the business. On the cash side, yes, I guess, first, let's step back. And one of the things that we said earlier was that over the course of the -- of 2011, is we would return the remaining proceeds from the Authentication Services divestiture, if you look from Q4 to this quarter, we paid about $1 billion in special dividends, $200 million in contingent interest and have done about $315 million of buybacks. So we've returned about $1.5 billion, which is in excess of proceeds that we received from Symantec. We have just have over $1 billion remaining on the buyback authorization. If you look at the balance sheet, about a little over $300 million is domestic, about $1.1 billion is international. And we're committed to returning value to shareholders, and we'll evaluate quarterly on the most effective way of achieving it.

Next we'll hear from Steve Ashley at Robert W. Baird & Co. Steven Ashley - Robert W. Baird & Co. Incorporated: I guess I would like to drill down on the domain names, appeared to slow a little bit from the growth we had seen, came in just a tick below the low end of the guidance range, a lot of noise out in the street during the period. And we just love to get some color on what you thought might have been going on there.

Steve, this Brian. Yes, if you take a step back, we said at the beginning of the year that the new names in the zone would grow about 7% to 9% yearly. And so as we sit here today, it looks like the net new names will be right in the middle of that range. In Mark's prepared remarks, he said the renewal rate be approximately 73.5%. And so we also saw the net new -- I'm sorry, the new registrations for the names to be the second largest in the company's history. And so there was a little decline over first quarter, but we still feel pretty comfortable with the 8 -- 7% to 9% year-over-year rate in the middle of that range.

This is Jim, I just want to point out as well that, well, the second quarter was the second largest in the company's history for net new adds. It was the largest 2Q net new adds in the company's history. Steven Ashley - Robert W. Baird & Co. Incorporated: Great. And in terms of the transition from the West Coast to the East Coast, in terms of the management team, the management structure, did everyone make the move, or are there still some open boxes in the org chart that need to be backfilled after the transition?

Steve, it's Mark. Yes, the entire executive team is on the East Coast at this point. So the transition is complete.

[Operator Instructions] Next from JPMorgan, Sterling Auty. Sterling Auty - JP Morgan Chase & Co: There's going to be lots of speculation on our conversations tomorrow, so I want to just kind of hit it. Is there any additional color that you can give, without giving the name of the company obviously, but the thought process going in? You navigated the company through a lot of divestiture, lot of change and successfully, so why not see it further on in terms of the growth of the company? What was the motivating factor to make the change now?

Sterling, so -- the -- where I'm going will get announced next week, so we won't' talk anymore about that. VeriSign is, as I think you know how I feel about it, is a fantastic company. I've got about 10 years of total time at VeriSign. It's been an absolute pleasure to work with the team, and particularly, in the last 3 years, gone through a lot of the restructuring, taking the company forward. So I kind of look at this as an apples-to-oranges situation. The opportunity I'm going to an is a private, pre-public company, got the opportunity to possibly take a company public. I haven't done that in my career before, so I think that's a good career opportunity for me. So it says nothing about VeriSign as to where I'm going, because this company is a hell of a great company, very stable, and it's got a great future. Sterling Auty - JP Morgan Chase & Co: All right, great. And then the -- now on to the current business. If we look at it -- so you got about 2 million names that were actually added in the quarter, while the net new addition, the second largest in a quarter -- correct me if I'm wrong, I think the true net addition peak was probably 4 million or thereabouts. What's it going to take -- can we get back to those kind of quarters were you're adding a net increase of 4 million names to the base? And what's going to be necessary? Because I also don't think that we're that far off the peak on the renewal rates.

Sterling, it's Mark. I think that whole period in 2007 coming in, into the first quarter of 2008 had the PPC phenomenon. And at which -- I'll call that a phenomenon. So in the absence of something very specific like that happen, I think you continue to see a more steady growth rate than that sort of pop we saw for 4 or 5 quarters back there, when you had 4 million names. Sterling Auty - JP Morgan Chase & Co: okay, that's fair. And the last question, is there -- was there any special programs that you're running with the registrars in the quarter? And then there's lots of news about Go Daddy and what might be happening with its ownership there. Was there any disruption that maybe you saw?

Sterling, this is Brian. On the Go Daddy front, there -- continue to be a really important customer. There was no disruption that we saw in the quarter, very focused, and they executed well during the quarter. On the revenue programs, as I stated earlier, we run a number of programs throughout the year. We did nothing different in the second quarter that we've done in previous quarters, and we actually increased our revenue guidance for the year and narrowed the range.

Next, we'll hear from Walter Pritchard at Citi. Walter Pritchard - Citigroup Inc: I have 2 questions. One, Brian, for you. You've given your revenue guidance for the year, and we can pretty much extrapolate that out for Q3 and Q4. And you've talked about, at least, 48% operating margins. I guess I'm not expecting you to put a tighter range on the 48%. But I guess I'm wondering, you did 48.5% here, and I guess wondering why things wouldn't expand from the 48.5%. And specifically, if there's anything outside of the $6 million that you talked about, the accrual that's an expense, that maybe we're not thinking about that comes back in, in the second half?

Okay. Couple of different things there. So on the margin side, 48.5%, 48.6%, how do you feel about the 48% on a go-forward basis. There's a couple of things. One is we're ramping up our hiring, and so we're -- there's a timing delta that will come on in the second half of the year. Secondly, as we took possession, if you will, of our new headquarters on July 1, which adds approximately $2 million a quarter run rate from an expense perspective, and there's a couple of other things that are happening. And so as I stated earlier, in previous calls, when we announced the Authentication sales, there's going to be some lumpiness between sort of the sale and the final transition. And so there are some onetime things that happened this quarter that won't repeat themselves in third and fourth quarter. And so we wanted to increase the guidance, and we said at least 48% exit operating margin in the fourth quarter. Walter Pritchard - Citigroup Inc: Great. And then just for Jim on the CEO search. I'd imagine, Jim, you're probably not stepping back in here to be permanent CEO. You've stepped in a few times, but I'm wondering if you'd maybe this early in the process, that you'd give us some color on sort of the search process, if you're looking at internal and external candidates, and any color on timing?

Okay, sure. Well, first of all, we'll look for another CEO, and I assume we'll conduct a search to do that. Right now, I'm focused on taking full advantage of Mark's willingness to be here until August 25 and ensure a smooth transition, so that's sort of my focus. We're in a transition. That's essentially a succession plan we've had in place. This news is just a few days old. But I'm really focused on taking advantage of Mark's availability and just working through a smooth transition and probably have more to say about it next time we talk.

[Operator Instructions] Next we'll hear from Gregg Moskowitz at Cowen and Company. Gregg Moskowitz - Cowen and Company, LLC: I'm wondering if you could talk about international domain name growth this quarter, and how that compared relative to domestic. And maybe if you can sort of touch on some of the more emerging markets countries, such as China, India and Brazil, that'd be helpful.

Hey, this is Brian. International continues to be about 39% of our base. We report the international names by where the registrar is located and not by where the end users at. We recently have seen an increase in resellers changing registrars and consolidation in the industry. Because the names don't switch until they're renewed, it's becoming difficult for us to track this activity. Therefore, the international growth that we report versus domestic growth is getting a little cloudier. However, international continues to be very important and is still growing. So for instance, China grew 16% year-over-year, EMEA grew about 13% year-over-year and India has grown about 11% year-over-year. Gregg Moskowitz - Cowen and Company, LLC: Okay, great. And, Brian, I'm wondering if you can give us a sense as well of how the contra revenue amount in Q2 compared on a sequential and year-over-year basis, as well as maybe what you're expecting for Q3?

Yes. So as I mentioned earlier, I think it was Sterling's question, it's -- it was less than Q1. It was immaterial. And we've guided towards revenue for the full year, and it's included in the revenue guidance.

Moving on to Dan Cummins with ThinkEquity. Daniel Cummins - ThinkEquity LLC: Can you give us a sense of what kind of revenue growth you're seeing sequentially right now in the NIA business? And I guess this is a question for Jim. What are your expectations for revenue contributions into next year from IDNs and the new TLDs? When does money start changing hands, particularly on the new TLD assignments that you may get?

Dan, this is Brian. I'll take the -- let me take the NIA one, first. And then either myself, Mark or Jim will take the TLD one. On NIA, we really like this space. As we said previously, we estimate it to be at a million -- $1 billion market with double-digit growth. Our teams had a great quarter. As I talked about this, we basically rebuilt the management team and the sales team, put together the product roadmap and are now out executing on that. And so in the quarter, we exceeded our bookings target, and we're continuing to build our sales force. We believe with our brand and operational performance, this is our market to lose. And so we haven't given any guidance specifically on that, but we're doing better than expected.

Dan, this is Jim. With respect to IDNs, we haven't given any guidance for 2012 of course. But the first IDNs actually don't go operational until January of 2013. So it's too early for us to be talking about that. Daniel Cummins - ThinkEquity LLC: The new TLD is Jan. '13 or I'm sorry?

I thought you said IDN specifically. If you're talking about new gTLDs, I'm sorry if I misunderstood.

Yes. Dan, the timeline given what ICANN just did in Singapore, is applications will be accepted starting in January 2012. Then there's that -- that will take basically the course of that year to run through the application process and all that's going to occur. They'll be awarded near the end of 2012. So as Jim is saying is you can expect to see new gTLDs actually hit the zone sometime in the late 2012 or early 2013. So from a contribution standpoint for 2012, it would be minimal regardless, and we haven't given any guidance for 2012 yet.

Yes, if you -- Jim. If you got to ICANN's website, their program is to take applications during the first few months of 2012, review them, make announcements at the end of the year. And then the first ones, at the earliest, would go operational in 2013. We're talking about 2 gTLDs, I just want to be clear. And that -- then of course obviously, we would have negotiate venture into relationships to provide registry and back-end services to these new gTLD operators. So I would expect that there would be some amount of time to trail the operation of some of these before we actually get involved and have any revenue that we could talk about or forecast. Daniel Cummins - ThinkEquity LLC: And I guess one other question I just had, related to IDNs, the international domain names. When do you think you might see some noticeable demand stimulus from some of the technical work you're doing around IDNs?

Yes. So on the IDN front specifically, the -- well, there's -- not to overcomplicate things, but there's 2 categories just to keep things straight. There is IDN which are the zone today already. We have about 1 million of those names in the zone. That means that the internationalized version of the name .englishcom, those names grow at about the same rate as the rest of our zone. The second type which is IDN.IDN or what people call the trans federations are in the new gTLD category. And as Jim said, from a timing perspective, you wouldn't see them hit the market until we are through the application process, because we would apply for those. So impact-wise, it'd be 2013 before we would be live or late 2012, I think, before we would be live in the market. So they're included in that new gTLD.

And we will take our last question from Ed Maguire at CLSA. Edward Maguire - Credit Agricole Securities (USA) Inc.: I was -- just wondering if you could discuss your thoughts about the potential pricing for your back-end services for new gTLDs. What you think the market might bear? You're able to charge varying tariffs, as it were, between com and net and names like .gov and would appreciate any color you could throw, at least, on what the dynamics of that market may look like, from your perspective.

Hey, Ed, this is Brian. The -- as Mark and Jim alluded to, the application window opens on January 12 and closes on April 12. And so it's really early in the process, and we don't know what the requirements are going to be for back-end service options, if you will. And so we have-- the team has been busy from business development perspective, working with a number of brands and registrars and setting up partnerships, but really depends based on what the applications are that they want us to do from a back-end perspective. We feel from a company perspective, with our operational performance and our 100% uptime for over a dozen years, that we're really well positioned to be the key player there.

And this is Jim, just adding a comment here as well. And -- Brian's right. It really depends on how people use some of these new gTLDs, which aren't entirely clear -- isn't entirely clear at this point. There may be people who applied to operate one of them for the purpose of selling names and making a business of it. If we were the back-end registry provider, we might have a certain type of relationship based on their exploitation of that gTLD. There are other folks from marketing or branding purposes or other recognition purposes that may operate it, that may not be primarily about selling domain names in that gTLD, we may have an entirely different model for that. We really need to wait and see what emerges, who applies, who succeeds and how they plan to use it. But again, having the premier most reliable, longest-standing registry operation, we certainly see that as an opportunity however it does play out. Edward Maguire - Credit Agricole Securities (USA) Inc.: Great. And one final question which is relating to your stance towards M&A. With the executive changes on the way, could you update us on your current thinking, and what your considerations may be regarding potential acquisitions?

Sure. I -- let me try to answer that question on a slightly broader level that I think will address the specific question that you raised. As I mentioned, this is a 4-year restructuring. We're at the tail end of it. But we have a management team that's executing on a strategy that's been developed in conjunction with the board over a number of years. Mark was on the board, I'm on the board, obviously, as Chairman. I've also been Executive Chairman. I've worked closely with his management team. But basically, there is no change in our strategy. There is no change in any of the company's outlook, forecast, its management team, its ability to operate, its commitment for growth. There's no change in our commitment to return value to shareholders, and there's no change in our commitment to grow. And if that makes sense through M&A, we've talked about tuck-in M&A where it might make sense. We still view that as an opportunity. We believe we have enough cash on hand for those opportunities that arise. But at this point, we don't see nor do we expect any significant M&A activity that would change the strategy that we're on.

We have time for one final question. That will come from Kash Rangan with Merrill Lynch. Kash Rangan - BofA Merrill Lynch: On the gTLD front, I'm just wondering if you could maybe have done this -- apologies for asking the question again. Can you give us a sense for how big the market opportunity is, be it number of domains, number of sites, and how fragmented or uniform does this market look like? And finally, what kind of synergies, not to get too ahead, but assuming you are successful on this next evolution, what kind of synergies do you currently have, via technology infrastructure, business operations, that will allow you to tap into that market effectively? That's it for me.

Sure, this is Jim. Let me address that again. I think, first of all, we -- our best information about what's likely to emerge in the new gTLD space comes from ICANN's own forecast. I think that their most optimistic expectations that they talked about are somewhere possibly near 1,000 ultimately. How long that takes them, when that ever gets realized, we're not sure. Again, we don't know how many new gTLD operators will come into the business primarily to sell domain names. So what that name space and what that opportunity represents from that perspective is just really, really difficult to identify. We just simply can't tell you. I think the best way to think about this is that it's a market that's going to emerge in a way that's yet undetermined. And that we, as the longest operating registry with the longest record of uptime and availability and reliability, are best positioned to exploit that market. That's the best offering we have, to be essentially the premier service provider, to what will undoubtedly be a number of people who have no registry experience. ICANN has also said that one of the most important things about a top-level domain is that the operation has to be demonstrably secure. It needs reliability and security, first and foremost, and so I think that bodes well for our opportunity. But I think it's just virtually impossible for us to predict what that market might look like, how big it might grow and what direction it might take. So I hope that answered that question.

At this time, Mr. Atchley, I would like to turn the conference back over to you for any additional or closing comments.

Thank you, operator. With regards to events in the third quarter, please note that Brian will be presenting at the Citi Technology Conference [Citi Global Technology Conference] at 1:45 p.m. Eastern Time on Wednesday, September 7. On September 13, Ben Petro, Senior Vice President, Network Intelligence and Availability, will be presenting at the ThinkEquity 8th Annual Growth Conference at 3:45 p.m. Eastern Time. The webcast registration details for these conferences will be available on the Investor Relations section of the VeriSign website. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation and continued support. This concludes our call. Thank you, and good evening.

Once again, that does conclude today's conference. We thank you all for joining us.