VeriSign's Jamster In Content Deal With Sprint -Analyst
NEW YORK -(Dow Jones)- VeriSign Inc.'s (VRSN) Jamster unit will begin selling cellphone ringtones to Sprint Nextel Corp.'s (S) Sprint subscribers within two weeks, according to Pacific Crest analyst Rob Owens.
The deal would mark a significant expansion of the pool of U.S. consumers that Jamster would be able to tap. Neither VeriSign nor Sprint representatives could be immediately reached for comment.
"We view the launch as a large positive for VeriSign because it adds 35 million subscribers to its addressable market," Owens said in a research note Monday.
The deal won't help third-quarter results because of the delay in revenue recognition from a one-month billing lag, he said.
Jamster offers cellphone ringtones, wallpaper, games and other content to consumers in the U.S. through carriers including Cingular Wireless, T-Mobile International AG, Cincinnati Bell Inc. (CBB), the Dobson Cellular unit of Dobson Communications Corp. (DCEL) and Alltel Corp.'s (AT) Cellular One.
VeriSign moved into the fast-growing cellphone ringtone business in June 2004 with the purchase of Jamba, a European firm, whose services the company has introduced in the U.S.
Mobile content services contributed $175 million of VeriSign's revenue in the second quarter of $444.8 million, with its Lightsurf unit contributing $10 million and European Jamba and U.S. Jamster services accounting for $165 million.
But fits and starts in results from the new content group has made VeriSign's stock volatile recently. It's shares traded up 59 cents, or 2.5%, recently to $23.98 on volume of 10.1 million shares, compared with an average daily volume of 5 million shares.
Pacific Crest has no investment banking relationship with the company, and Owens doesn't own its stock.
-By Riva Richmond, Dow Jones Newswires; 201-938-5670; riva.richmond@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 15th August 2005
