Verisign Inc., flush with the proceeds of its initial public stock offering, is turning much of its marketing attention to the financial services industry.

The pioneering vendor of digital certificate services has hired banking and payment services industry veteran Thomas E. Honey to lead the charge.

Mr. Honey, a former senior executive at Visa, was most recently director of digital certification and public key infrastructure at International Business Machines Corp., where he participated in its well-publicized e- business strategy.

Mountain View, Calif.-based Verisign-which has had a close relationship with Visa and established one of the better-known brand names in the emerging field of digital certification-said it expects its bank-focused strategy to tap into growing interest in Internet-based electronic commerce.

Mr. Honey will help banks flesh out potential certificate applications, including SET-the Secure Electronic Transactions standard for Internet- based credit card payments. SET requires the issuance of digital certificates, using data encryption technology, to authenticate all parties involved in an on-line payment.

"Tom has a lot of executive-level experience in the banking industry for electronic transactions and for certificate authorities," said Richard Yanowitch, vice president of marketing at Verisign. "He represents our first focus on a vertical market (banking) at a truly strategic level."

The stakes in this emerging market are seen as climbing, and accordingly attracting bankers' attention.

International Data Corp., Framingham, Mass, has predicted that wholesale and retail electronic commerce will total $223.1 billion annually by 2001, up from last year's $10.6 billion. Some industry observers are beginning to view such estimates as conservative.

NationsBank Corp., among the early adopters of Verisign's technology, will begin testing its certificate system in its global finance area in Chicago later this year.

Large corporations will be able to tap into NationsBank's computer systems to conduct transactions over the Internet, using digital certificates and Verisign's enterprise-wide security services. These services are based on cryptography technology developed by RSA Data Security Inc., which spun off Verisign three years ago.

Roger White, vice president of information security at the Charlotte, N.C.-based banking company. said he met Mr. Honey last year and was impressed.

"The Internet phenomenon has brought privacy and security issues to the forefront," he said. Mr. Honey "makes you understand the issues and gives deep attention to the details."

Mr. Honey worked early in his career at Wells Fargo & Co. and Bank of California. At Visa U.S.A. and Visa International from 1973 to 1984, he helped develop such services as the Visa Check card, Visa gold card, and Visa travelers checks.

He served as president and executive director of the Consumer Bankers Association in 1986-87. From 1992 to 1995 he was executive vice president of the NYCE regional electronic banking network.

Mr. Honey, who was not available for an interview last week, joined Verisign just before its recent IPO.

Verisign offered three million shares at $14 each on Jan. 30, raising $42 million. The price was $27 as of midday Monday.

The stock market reaction was "a good general sign that people are enthusiastic about the electronic commerce market," said Bill Burnham, analyst at Piper Jaffray Inc., Minneapolis. "It was a spectacular IPO."

But he cautioned that Verisign exhibits many of the characteristics of other publicly traded Internet stocks, notably Netscape Communications Corp. and Cybercash Inc., which fizzled when anticipated revenues failed to materialize.

Verisign, which reported a net loss of $19.2 million for 1997, (revenues were $6.1 million through September, according to the prospectus), is pursuing a business that is far from mature and that it in fact has to help create.

Its IPO proceeds are expected to carry the company for about 12 months before it must once again seek financing, according to its prospectus.

"This pattern has been repeated over and over," Mr. Burnham said. "Investors have to be prepared for the long haul on this one, because this market will be sold one certificate at a time."

Scott Smith, principal analyst at Current Analysis Inc., Washington, said Verisign's early efforts have made its name synonymous with the concept of a digital certificate and certificate authority, which is a trusted third party vouching for the authenticity of electronic trading partners.

"The best thing they have going for them is their brand name," Mr. Smith said.

Another factor in Verisign's favor is that it forged early alliances with such heavyweights as Visa and Microsoft Corp., the analyst added. But he said competition will be tough from the likes of IBM, CertCo LLC., Entrust Technologies Inc., and GTE Cybertrust Solutions Inc.

Mr. Smith said many of these companies are farther along in developing systems that can manage the issuance and maintenance of digital certificates for large institutions.

"It's early in the game, and there is still plenty of opportunity to flesh out a stronger business plan," Mr. Smith said. "People are only now beginning to recognize the importance of a public key infrastructure, and are trying to decide which vendor to go with."

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