January 13, 2004 5:35 PM PST

VeriSign chosen to run RFID tag network

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VeriSign, the company that maintains the Internet's .com and .net domain registry, has been hired to run a new directory to be used to keep tabs on consumer goods using a technology known as radio frequency identification.

VeriSign announced on Tuesday its contract with EPC Global, a recently formed organization in charge of administering the new product codes and technical standards associated with radio frequency identification (RFID) networks.

The terms of the contract were not disclosed. VeriSign said it would have no material impact on its finances this year.

RFID technology has been hailed as a next-generation bar code, allowing companies to handle inventory more efficiently. Some major global companies, including retail giant Wal-Mart Stores, and the U.S. Defense Department have embarked on big RFID projects with the expectation the technology will help prevent goods from being lost, stolen or otherwise misdirected and keep supplies flowing to where they're needed most.

Others, such as Gillette and Procter & Gamble, are experimenting with using RFID systems in stores to prevent shoplifting and to monitor stock on the shelf.

Any item with an RFID "tag"--a special radio frequency-emitting microchip--can wirelessly broadcast information about itself, such as its location and its origin. Each tag--experts say there could be billions of them within the next several years--has a unique number, or electronic product code (EPC), and that's where VeriSign comes in. The Mountain View, Calif.-based company says it will provide part of the service that allows EPC Global members to retrieve and record information about a particular item via the Internet using the code stored on its RFID tag.

VeriSign said that in addition to operating the EPC directory, it plans to sell additional services designed to help companies securely share inventory data.

VeriSign was recently the subject of much controversy when it began redirecting Web traffic for misspelled or nonexistent domain names to its own site, called Site Finder, rather than displaying the standard error page in a bid to boost advertising revenue.


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