Monday November 20 10:02 AM ET

NEW YORK (Reuters) - Security software supplier Baltimore Technologies and register.com, the No. 2 Web domain name registrar, said on Monday they had forged a digital security pact in a competitive counterpunch to market leader VeriSign Inc.

Terms of the deal call for Dublin-based Baltimore to offer digital certificates, the computer equivalent of a handwritten signature, to New York-based register.com customers as they sign up for Web Site addresses, the companies said.

Register.com would offer digital certificates to its customer base of millions of individuals and small and medium-sized businesses.

The certificates act like ``electronic passports,'' allowing Internet merchants to provide secure information delivery over their Web Sites and encode private customer information such as credit card numbers.

``This agreement brings our certificate products to the widest possible audience,'' Paddy Holahan, Baltimore's executive vice president of marketing, said in a statement.

``Now companies going online can buy world-class security at the same time as establishing their Web presence.''

The deal parallels the strategy behind Mountain View, Calif.-based VeriSign's acquisition of Network Solutions Inc., the former monopoly provider of ``.com'' Web addresses.

The two agreed to merge last summer in a deal worth some $20 billion, the highest valued software combination ever.

The VeriSign-Network Solution merger and the new Baltimore-register.com partnership, in effect, give both combinations direct links to millions of potential customers who must regularly renew their Web site domain registrations.

Complete Web Site Security

Each pair of companies provides a range of authentication, payment, validation and domain registration services that represent a complete system for securing Internet sites.

For its part, Register.com has registered more than three million customers for Internet domain names, mostly under the ''com'' category.

Baltimore supplies a complete family of Internet security products to secure business done over computer networks, including software and hardware, encryption tools, and the ''keys'' used to verify a computer user's identity.

Still, the Baltimore-register.com partnership has a long way to go catch VeriSign, which generates more than 80 percent of the world's digital certificate authority services revenues, with Baltimore the distant No. 2.

Baltimore also ranks second in the related security key software market, behind leader Entrust Technologies Inc., based on statistics from market research firm International Data Corp.

The total market for such security products could climb to $15 billion by 2004 according to a recent report by brokerage Bear Stearns & Co.

Register.com's deal with Baltimore comes just days after ICANN, the Internet's technical standards governing body, awarded register.com control of a new ``.pro'' name registry for professionals such as lawyers and doctors, part of a major expansion beyond suffixes ending in ``.com,'' ``.net,'' or ``.uk.''