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VeriSign, Inc. (VRSN - Analyst Report) recently announced that the board of directors has authorized share repurchase worth approximately $458.8 million. This program is in addition to approximately $541.2 million remaining under the previous 2010 Share Buyback Program. 

The recent authorization brings the total buyback program to approximately $1.0 billon. 
The company has a healthy cash balance with recent divestitures and is making efforts to return the same to investors. In 2007, VeriSign decided to focus its attention on its core competencies to provide highly scaleable, reliable and secure Internet infrastructure services to customers around the world.
Hence, the company divested a number of non-core businesses in its portfolio, such as communications, billing and commerce, content delivery, messaging and enterprise security services. Most recently, the company divested its Authentication Services business.
VeriSign has been consistently repurchasing shares to utilize excess cash generated from the sale of business. In 2011, the company repurchased approximately 16.3 million shares for $534.6 million. In 2010, VeriSign repurchased approximately 15.7 million shares for $437.7 million. In 2009, the company used $252.8 million to repurchase 11.3 million shares. 
In addition, VeriSign also paid a special dividend of $2.75 per share totaling $463.5 million in 2011 and a special dividend of $3.00 per share totaling $518.2 million in 2010. 
Although we applaud management’s efforts to boost shareholders value and return excess cash to shareholders, we would like to see the company investing in suitable avenues leading to diversification and better growth rates. With the sale of most non-core operations, continuing operations primarily consist of Naming Services (comprising Registry Services and Network Intelligence and Availability [NIA] Services). 
The company recently appointed a new CFO and it remains to be seen if a change in management will affect the company’s performance as the previous management was instrumental in undertaking the bulk of the restructuring that the company has undergone in the last few years. 
Meanwhile, VeriSign faces stiff competition from the likes of Tucows Inc. (TCX) and others. Revenues at Tuscows surged 12% in the third quarter with broad-based performance across the portfolio. Estimates have been more or less static over the few days for Tuscows as the company beat estimates by a penny.
As of now, we maintain our Neutral recommendation on VeriSign, Inc, as we believe that most of the positives are already discounted at current levels and the current environment demands caution from the investors.
Our Neutral recommendation is supported by a Zacks #3 Rank, which translates into a short-term rating of Hold.

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