VeriSign’s bartering accounted for 3.4% of revenue

Shares of Web-hosting firm VeriSign dropped more than 9% yesterday on news of accounting practices revealed in an SEC filing.

In its 10-K, the company revealed that 3.4% of its revenues in 2001 came through reciprocal agreements, in which Verisign traded its products and services for products and services from other companies. These trades were proper, because Verisign would have purchased these goods had it not traded for them, the company said. There was no revenue from reciprocal deals in 1999 or 2000.

But the market has become increasingly skeptical of such deals in recent weeks. After long-haul carrier Global Crossing declared bankruptcy in January, the SEC opened an investigation into the company’s habit of trading bandwidth with other carriers and thereby increasing its revenue.

VeriSign’s stock has regained much of the ground lost in yesterday’s trading, closing today at $28.10, up more than 6 percent.

--Toby Weber, staff writer