You should read the following discussion in conjunction with the interim unaudited Condensed Consolidated Financial Statements and related notes.

Except for historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our anticipated costs and expenses and revenue mix. Forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section titled "Risk Factors" in Part II, Item 1A. You should carefully review the risks described in other documents we file from time to time with the Securities and Exchange Commission, including the Quarterly Reports on Form 10-Q or Current Reports on Form 8-K that we file in 2008 and our 2007 Form 10-K, which was filed on February 29, 2008, which discuss our business in greater detail. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Overview

We operate intelligent infrastructure services that enable and protect billions of interactions every day across the world's voice and data networks and provide enterprises, governmental entities, and individuals with highly scaleable, reliable and secure Internet infrastructure and identity services.

Our business consists of the following reportable segments: Internet Infrastructure and Identity Services ("3IS"), and Other Services. Our 3IS segment, comprising the retained core businesses from our former ISG segment, consists of our Naming Services, Secure Socket Layer ("SSL") Certificate Services, Identity and Authentication Services ("IAS") businesses and VeriSign Japan.

The Naming Services business is the exclusive registry of all .com, .net, .cc and .tv domain names and maintains a shared registration system that allows registrars to enter new names in the master directory and to submit modifications, transfers, re-registrations and deletions for their domain names. The SSL Certificate Services business enables our online customers, such as enterprises or Internet merchants, to authenticate themselves to their end users and ecrypt Internet communications through use of public key infrastructure ("PKI") and SSL protocol. The IAS business includes managed PKI services, unified authentication services, and identity protection services, all of which provide services intended to help enterprises secure intranets, extranets and other applications and devices and provide authentication credentials. VeriSign Japan is a majority-owned subsidiary and its operations primarily consist of resale of SSL Certificate Services and IAS.

The Other Services segment consists of the continuing operations of non-core businesses as well as legacy products and services. The businesses included in the Other Services segment provide various managed solutions to fixed line, broadband, mobile operators and enterprise customers through our integrated content and commerce platforms.

During the fourth quarter of 2007, we announced a change to our business strategy to allow management to focus its attention on our core competencies and to make additional resources available to invest in our core businesses. The strategy calls for a divestiture or winding down of all the business lines in our former Communications Services Group ("CSG"), and all business lines in our former Internet Services Group ("ISG") except for our core businesses. The business lines that we expect to divest, including those that have been sold since the fourth quarter of 2007, accounted for approximately 50% of our overall revenues in fiscal 2007. The

continued execution of our divestiture plan is subject to the availability of financing, identification of buyers, and general market conditions. While we are executing our divestiture plan, we will experience additional risks, including, but not limited to the disruption of our business and the potential loss of key employees; difficulties separating operations, services, products and personnel; and the potential damage to relationships with our existing customers. For example, our divestiture plan will require a substantial amount of management, administrative and operational resources. Once our divestiture plan is completed, the scale and scope of our operations will decrease in absolute terms, which we expect will allow our remaining core businesses to benefit from a more efficient and streamlined operational structure. However, we cannot assure you that we will be able to achieve the full strategic and financial benefits we expect from the divestiture of our non-core businesses and there is no guarantee that the planned divestitures will occur or will not be significantly delayed.

Our Core Businesses

Our core businesses consist of our Naming Services, SSL Certificate Services, and IAS businesses.

Naming Services

As of June 30, 2008, we had approximately 87.3 million domain names registered under the .com and .net registries. The number of domain names registered is largely driven by Internet usage and broadband penetration rates. Although growth in absolute number of registrations remains greatest in mature markets such as the United States and Europe, growth on an annual percentage basis is expected to be greatest in markets where Internet penetration has demonstrated the greatest potential for growth. We are largely insulated from the risk posed by fluctuations in exchange rates due to the fact that all revenues paid to us for .com and .net registrations are in U.S. dollars.

SSL Certificate Services

As of June 30, 2008, we had an installed base of SSL certificates of approximately 1.1 million. The major factors impacting the growth and performance of our SSL Certificate Services business are the penetration and adoption of the Internet, especially through broadband services, the spread of e-commerce, the utilization of electronic means for executing financial transactions (such as credit card payments), and the extent to which advertising through search engines encourages consumers to engage in e-commerce. As a result of the growing impact of the Internet on global commercial transactions, we expect continued revenue growth in our business, primarily in markets outside of the United States where e-commerce has the largest growth potential.

IAS

As with our SSL Certificate Services business, the major factors impacting the growth and performance of our IAS business are the penetration and adoption of the Internet, especially through broadband services, the spread of e-commerce, the utilization of electronic means for executing financial transactions (such as credit card payments), and the extent to which advertising through search engines encourages consumers to engage in e-commerce. As a result of the growing impact of the Internet on global commercial transactions, we expect continued growth in our business, in particular from our VeriSign Identity Protection ("VIP") and One Time Password ("OTP") programs which we expect will account for a greater percentage of our product mix over time.

Business Highlights and Trends-Three and six months ended June 30, 2008

Our 3IS segment recorded revenues of $233.0 million and $456.0 million during the three and six months ended June 30, 2008, respectively, experiencing an increase of 21% and 22%, respectively, from the same periods last year. For the three and six months ended June 30, 2008, domestically and internationally, we experienced revenue growth in all of the business lines in the 3IS segment, with the largest growth coming from our Naming services business. Our increased revenues are primarily related to the continued expansion of e-commerce which has, in turn, resulted in an increase in active domain names ending in .com and .net, an increase in the installed base of SSL certificates and an increase in demand for our identity and authentication services.

Our Other Services segment recorded revenues of $70.3 million and $143.8 million during the three and six months ended June 30, 2008, respectively, experiencing an increase of 7% and a decrease of 7%, respectively, from the same periods last year. We expect revenues for our Other Services segment to decrease in absolute dollars as we divest or wind down non-core businesses.

We recorded a net loss of $68.0 million and $74.1 million during the three and six months ended June 30, 2008, respectively, as compared to a net loss of $4.7 million and a net income of $57.0 million during the three and six months ended June 30, 2007, respectively. Our net loss during the three and six months ended June 30, 2008, is primarily a result of an impairment charge of goodwill of $45.8 million related to our Post-pay business and estimated losses on assets held for sale of $45.9 million during the second quarter of 2008.

On June 19, 2008, we sold certain land and buildings located in Mountain View, California for net cash proceeds of $47.6 million. At the time of closing, we entered into a separate lease agreement with the purchaser of the Mountain View property. We leased the property from the purchaser for an initial term of 30 months, expiring December 31, 2010, with an option to extend the lease for five years from the date of initial term expiration. Our lease obligations under the initial term are $14.1 million. As a result of the sale, we recorded a loss of approximately $79.1 million.

On April 30, 2008, we sold our Digital Brand Management Services ("DBMS") business which offered a range of corporate domain name and brand protection services that help enterprises, legal professionals, information technology professionals and brand marketers monitor, protect and build digital brand equity for net cash proceeds of $50.4 million and recorded a gain on sale of $30.5 million. The net cash proceeds include $5.0 million that was placed in an escrow account to cover any contingent claims made by the buyer against us through April 30, 2009. If no claims are made, the amount in escrow will be released to us during our second quarter of fiscal 2009. The DBMS business was part of our former ISG segment. The historical results of operations of the DBMS business have been classified as discontinued operations for all periods presented.

On April 30, 2008, we sold our Content Delivery Network ("CDN") business which offered broadband content services that enable the delivery of high-quality video and other rich media securely and efficiently at a very large scale, for net cash proceeds of $1.0 million and recorded a gain on sale of $1.4 million. We have retained an equity ownership in the CDN business and have accounted for our investment in the CDN business on an equity method basis. As a result of our continuing involvement in the CDN business, the historical results of operations of the CDN business have not been classified as discontinued operations. The CDN business was part of our former CSG segment.

On March 31, 2008, we sold our Self-Care and Analytics ("SC&A") business unit, which provided online analysis applications for mobile communications customers and online customer self-service with a single view of billing across multiple systems, for net cash proceeds of $14.2 million and recorded a gain on sale of $0.5 million. The SC&A business was part of our former CSG segment. The historical results of operations of the SC&A business have been classified as discontinued operations for all periods presented.

Our 2008 Restructuring Plan, was announced in late 2007 to complement our divestiture plan. We recorded $45.2 million in restructuring charges related to the 2008 Restructuring Plan as of June 30, 2008, of which expenses related to severance and benefit costs for terminated employees, inclusive of amounts for discontinued operations, totaled $43.6 million. Since announcing the 2008 Restructuring Plan, we have reduced our headcount in businesses targeted for divestiture, either through sale of businesses, employee terminations or voluntary resignations.

Recent Accounting Pronouncements

Recent accounting pronouncements are detailed in Note 1, "Basis of Presentation," of the Notes to Condensed Consolidated Financial Statements.

Subsequent Events

The ASR agreement described in Note 11, "Repurchase of Common Stock," of the Notes to Condensed Consolidated Financial Statements, was completed on July 10, 2008, when we received an additional 1.4 million shares for an aggregate of 16.5 million shares under the terms of the ASR agreement. The average price per share paid by us on the ASR agreement was $36.33.

In July 2008, we repurchased approximately 3.5 million shares of our common stock at an average stock price of $34.38 per share for an aggregate of $120.0 million pursuant to a stock repurchase agreement with a financial institution under the 2006 Stock Repurchase Program.

In July 2008, we invested an additional amount of $15.7 million pursuant to capital calls approved by the board of managers of the joint ventures with Fox, and recorded the amount as investments in unconsolidated entities. The purpose of the capital calls was to fund the ongoing business and working capital needs of the joint ventures. We do not have further commitments for any additional investments in the joint ventures.

On August 5, 2008, our Board of Directors authorized additional stock repurchases having an aggregate purchase price of up to $680.0 million of our common stock under the 2008 Stock Repurchase Program.

Results of Operations

The following table presents information regarding our results of operations as
a percentage of revenues:



                                                  Three Months Ended             Six Months Ended
                                                       June 30,                      June 30,
                                                2008             2007           2008           2007
Revenues                                           100 %            100 %         100 %          100 %

Costs and expenses
Cost of revenues                                    28               32            30             32
Sales and marketing                                 17               24            18             26
Research and development                            11               12            11             14
General and administrative                          19               29            20             23
Restructuring, impairments and other
charges, net                                        45                6            27              7
Amortization of other intangible assets              2                6             2              7

Total costs and expenses                           122              109           108            109

Operating loss                                     (22 )             (9 )          (8 )           (9 )
Other (loss) income, net                            (2 )              5            (1 )           18

(Loss) income from continuing operations
before income taxes, earnings (loss) from
unconsolidated entities and minority
interest                                           (24 )             (4 )          (9 )            9
Income tax benefit (expense)                         2               (2 )           -             (2 )
Earnings (loss) from unconsolidated
entities, net of tax                                 -                -             -              -
Minority interest, net of tax                        -                -             -              -

(Loss) income from continuing operations           (22 )             (6 )          (9 )            7
Discontinued operations, net of tax                  -                4            (3 )            4

Net (loss) income                                  (22 %)            (2 %)        (12 %)          11 %

Revenues

We have two reportable segments: Internet Infrastructure and Identity Services
and Other Services. A comparison of revenues is presented below:



                                                     Three Months Ended
                                                          June 30,              %
                                                     2008           2007      Change
                                                   (Dollars in thousands)
 Internet Infrastructure and Identity Services   $     232,963    $ 193,260       21 %
 Other Services                                         70,277       65,728        7 %

 Total revenues                                  $     303,240    $ 258,988       17 %


                                                      Six Months Ended
                                                          June 30,              %
                                                     2008           2007      Change
                                                   (Dollars in thousands)
 Internet Infrastructure and Identity Services   $     456,048    $ 374,163       22 %
 Other Services                                        143,825      154,721       (7 %)

 Total revenues                                  $     599,873    $ 528,884       13 %

The changes in revenues during the three and six months ended June 30, 2008, are described in the segment discussions that follow.

Internet Infrastructure and Identity Services

3IS segment revenues increased $39.7 million and $81.9 million during the three and six months ended June 30, 2008, respectively, as compared to the same periods last year.

The following table compares active domain names ending in .com and .net managed by our Naming Services business and the approximate installed base of SSL certificates in our SSL Certificate Services business as of June 30, 2008 and 2007:

                                                        June 30,               %
                                                   2008           2007       Change
 Active domain names ending in .com and .net   87.3 million   73.0 million       20 %
 Installed base of SSL certificates               1,056,000        923,000       14 %

Naming Services

Revenues in our Naming Services business are derived from registrations for domain names in the .com, .net, .tv, and .ccdomain name registries. We receive a fixed fee per domain name registered with the .com and .net registries, at a fee per annual registration that is fixed pursuant to our agreements with the Internet Corporation for Assigned Names and Numbers ("ICANN"). Changes in revenues are driven largely by increases in the number of new domain name registrations and the renewal rate for existing registrations.

Our Naming Services revenues increased $26.0 million and $50.4 million during the three and six months ended June 30, 2008, respectively, as compared to the same periods last year, primarily due to a 20% year-over-year increase in active domain names ending in .com and .net and partly due to an increase in .com and .net domain name registry fees which became effective during October 2007.

Our .com and .net domain name registry fees will increase further by 7% and 10%, respectively, which are expected to become effective on October 1, 2008.

SSL Certificate Services

Revenues in our SSL Certificate Services business are derived from licensing and service fees charged to our customers for the issuance of SSL certificates that authenticate their identity to the third parties with whom they carry out secured transactions. Revenues in the SSL Certificate Services business are related to fees charged per certificate, which are based upon a number of factors, including: (i) the brand name under which the certificate is issued, level of encryption and rigor of authentication; (ii) the number of servers authenticated, and (iii) the duration of the certification. We issue SSL certificates for one, two and three years and the majority of our customers tend to commit to shorter certifications. We have historically experienced strong renewal rates. We have not increased prices for our SSL certificates during the first six months ended June 30, 2008.

Our SSL Certificate Services revenues increased $11.6 million and $24.9 million during the three and six months ended June 30, 2008, respectively, as compared to the same periods last year, primarily due to a 14% year-over-year increase in the installed base of SSL certificates.

IAS

Revenues in our IAS business are derived from a one-time credential sale to the customer seeking network services, and a one-time set-up fee. We also charge an annual service fee based upon the number of individual users authorized by the customer to access its network and a customer support fee. Our managed PKI service is characterized by lower growth rates than other product lines within the IAS business, reflecting the greater maturity of our managed PKI service. Over time, we expect the VIP and OTP programs will account for a larger percentage of our product mix over time. We anticipate that due to consistent growth, our managed PKI service could remain a significant presence in our product mix.

Our IAS revenues increased $1.4 million and $5.6 million during the three and six months ended June 30, 2008, respectively, as compared to the same periods last year, primarily due to increased demand for our enterprise authentication and identity protection services.

Other Services

Other Services segment revenues increased $4.5 million and decreased $10.9 million during the three and six months ended June 30, 2008, respectively, as compared to the same periods last year. The decrease during the six months ended June 30, 2008, as compared to the same period last year, was primarily due to a decrease of $28.9 million from our legacy businesses which includes the divested majority ownership interest in our Jamba subsidiary, our CDN business and other smaller historical businesses. Our mobile content and messaging services revenues increased $5.1 million and $13.1 million during the three and six months ended June 30, 2008, respectively, as compared to the same periods last year primarily due to an increase in volume in our inter-carrier Multi-Media Messaging Services ("MMS") and Short Send Messaging Services ("SMS"). Our payment services revenues increased $2.5 million and $4.9 million during the three and six months ended June 30, 2008, respectively, as compared to the same periods last year, primarily due to an increase in revenues from our advanced billing and customer care services to wireless carriers.

We expect revenues for our Other Services segment to decrease in absolute dollars as we divest or wind down certain non-core businesses in 2008. Upon classification as discontinued operations, the revenues of the non-core business will be reclassified from Other Services to discontinued operations.

Within the Other Services segment, our divestiture plan has led some of our customers to delay entering into arrangements with us until they are able to obtain greater clarity concerning the composition and direction the divested businesses will take following the completion of the divestiture plan. We anticipate having greater clarity as to the trends impacting these businesses as the divestiture plan progresses.

Geographic Revenues

A comparison of our geographic revenues is presented below:



                                      Three Months Ended
                                           June 30,            %
                                       2008        2007      Change
                                        (In thousands)
                   United States    $  218,067   $ 201,708        8 %
                   Switzerland          52,203      26,048      100 %
                   Japan                20,512      18,044       14 %
                   Other                12,458      13,188       (6 %)

                   Total revenues   $  303,240   $ 258,988       17 %

                                      Six Months Ended
                                          June 30,            %
                                      2008        2007      Change
                                       (In thousands)
                   United States    $ 434,826   $ 417,236        4 %
                   Switzerland         97,803      29,883      227 %
                   Japan               39,563      34,241       16 %
                   Other               27,681      47,524      (42 %)

                   Total revenues   $ 599,873   $ 528,884       13 %

Revenues are generally attributed to the respective countries in which the VeriSign contracting entities are located, which does not necessarily reflect the location of our customers.

Revenues in Switzerland increased $26.2 million and $67.9 million during the three and six months ended June 30, 2008, respectively, as compared to the same periods last year, primarily due to the continued implementation of our global business structure including contracting through our foreign subsidiaries for services provided to customers located outside the United States and Japan. Revenues in the United States increased $16.4 million and $17.6 million during the three and six months ended June 30, 2008, respectively, as compared to the same periods last year, primarily due to continued growth in our Naming Services and SSL Certificate Services businesses. Revenues in Japan increased $2.5 million and $5.3 million during the three and six months ended June 30, 2008, respectively, as compared to the same periods last year, primarily due to increases in demand from our SSL Certificate Services and IAS. Revenues from our Other regions decreased $0.7 million and $19.8 million during the three and six months ended June 30, 2008, respectively, as compared to the same periods last year. The decrease during the six months ended June 30, 2008, was primarily due to the divestiture of our majority ownership interest in our Jamba subsidiary in the first quarter of 2007.

Mature markets, such as the United States and Western Europe, where broadband and e-commerce have seen strong market penetration, may be expected to see consistent incremental growth reflecting the maturity of these markets. We expect to see larger increases in revenues from other EMEA and APAC countries driven by greater growth in international regions, resulting from greater . . .