II (aka High-tech Security)

Les Schaffer schaffer at
Mon Dec 17 14:43:21 MST 2001

December 17, 2001

A Surge in Demand to Use Biometrics


 Sept. 11 created a long-awaited moment for the biometrics industry,
 which centers on equipment that identifies people by using
 characteristics thought to be unique to each person, like
 fingerprints, voice patterns and spacing of facial features.

 "We've always said that some event would have to happen to propel the
 technology to the forefront," said Robert McCashin, chief executive
 of Identix (news/quote), a leading biometrics company based in Los
 Gatos, Calif.


 Nearly all of the 200 or so companies involved in security and
 identity verification, most of them small, were inundated with
 inquiries about their products. Venture capitalists began poring over
 the sector. Large information technology integrators like
 I.B.M. (news/quote), Andersen Consulting and Electronic Data Systems
 (news/quote) advertised programs they had in place with biometrics
 technology providers and they negotiated new ties. And Mr. McCashin
 and other experts saw their calendars fill up with invitations to
 testify before Congressional committees, brief regulators and speak
 at numerous trade shows.

 Stocks in several publicly traded biometrics companies
 soared. Visionics (news/quote), which makes facial recognition and
 fingerprint systems, quadrupled from its Sept. 10 closing price of
 $4.27 before falling back to $16.58 by last Friday. Viisage
 Technology (news/quote), a rival facial recognition vendor, soared
 from $1.94 on Sept. 10 to $15.97 in early October, closing on Friday
 at $11.01. Identix, which was trading at about $4 before the attacks,
 was able to sell nearly 7.4 million shares last month at $7, for a
 total of almost $52 million, in a private placement. It closed on
 Friday at $13.77.

 Further cheering the vendors, polls show that Americans would be
 willing to give up some privacy if that was the price of better
 security. Although many experts see the cost of biometric systems and
 the shortcomings in their performance as the major barrier to their
 growth, many others cite the privacy issue - the widespread unease
 among Americans about whether the information obtained from biometric
 devices might be abused by government agencies, employers or

 "This could speed up the use of biometrics by three or four years,"
 Mr. McCashin said.

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