Neustar, the Sterling-based company best known for operating the system that enables U.S. consumers to keep their numbers when they switch cellphones, on Thursday bought Australian information-technology company Bombora for $86.9 million.
The purchase is part of Neustar’s broader shift in strategy toward becoming an information-services company focused on digital marketing.
Neustar, which started as a business unit of Lockheed Martin, has done well financially in recent years. It had revenue topping $950 million at the end of 2014, up more than 80 percent since 2010.
But in March the Federal Communications Commission said it would hand the contract for so-called number portability services to another firm. That work represents about half of Neustar’s business.
Neustar has filed suit against the FCC to reverse the decision. But in the meantime, it is beginning to prepare for the transition and search for new ways to make up for the lost business.
“It’s not just a transformation of revenue growth. It’s a transformation of a company, of a culture, of the way we do things,” said Chief Financial Officer Paul Lalljie.
Even before it lost the contract, Neustar had been trying to wean itself off a dependence on the FCC work. In 2010, when chief executive Lisa A. Hook took over, the contract accounted for about 65 percent of the company’s revenue. Today, that figure is down to 47 percent.
In addition to managing phone numbers, Neustar provides services to help manage Internet addresses and Web sites. Portions of the company also focus on digital marketing services, a line of business that didn’t exist at the company five years ago. That unit has posted year-over-year revenue growth of 17 percent, while revenue from the company’s Web security services are growing by a similar 18 percent.
The marketing business grew out of the insights the company gleaned from its Internet work.
“We saw and accessed so much data on a daily basis. It was as if we were killing buffalos just for the horns and throwing away the rest of the body,” said Lalljie.
Neustar also has jumped into the market for “brand-specific” domain names. Companies bored by the traditional “.com” Web sites are paying to customize the letters that appear to the right of the dot in a Web address.
Last year Neustar acquired .CO Internet, a company that handles Web site authentication for customized “.co” addresses. And the newly acquired Bombora owns some of most widely used customized domain names in the Asia-Pacific region. Any Web site that ends in “.au,” “.melbourne” or “.sydney” passes through Bombora’s registry system, for instance. Bombora also offers a suite of domain name registry services for “.ae” sites based in the United Arab Emirates, “.om” sites based in Oman and “.qa” sites based in Qatar.
“It’s going to take some time for these new domain names to sink in, from a consumer perspective,” said Bryan Yeager, an analyst at New York-based digital marketing company eMarketer. “But [Neustar’s acquisition] is laying the groundwork and acquiring some of these domains that might be popular.”