AT&T Sees VeriSign as Security Cash Cow

DALLAS (TheStreet) -- AT&T (T) has acquired VeriSign's (VRSN) global security consulting business as the telecom giant attempts to strengthen its cybersecurity story.

AT&T, which is seen as an increasingly attractive stock thanks to the impact of its Apple (AAPL) iPhone deal, will use VeriSign to help lock down enterprise data.

With cybercriminals becoming ever more sophisticated, security is turning into something of an arms race for technology companies and service providers.

AT&T, which competes with Sprint Nextel (S) and Verizon (VZ), already offers managed security services such as firewalls to guard against viruses, and is now looking to boost this revenue stream. VeriSign's security consulting division works with Fortune 500 firms to identify potential gaps, respond to attacks and also meet security compliance requirements.

"The combined capabilities of VeriSign's security consulting business with AT&T's global reach, networking and security portfolio, will broaden our consulting and risk analysis expertise," said Ron Spears, CEO of AT&T business solutions, in a statement.

The deal also completes VeriSign's strategy of carving off 13 of its business units. Earlier this year VeriSign sold off its messaging business to Syniverse for $175 million, and the global security consulting unit was the last on the block.

The Internet firm announced a major restructuring plan in late 2007, outlining its strategy to boost profitability and revenue by selling off slower-growth units in communications, billing and commerce. Last year VeriSign sold its Kontiki video content technology to MK Capital, which followed the sale of the company's analytics business unit to Globys.