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Security industry surges on heightened awareness

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As stock market indexes plummeted in the aftermath of Sept. 11, shares of security companies surged upward.

"The second most-felt feeling of people after Sept. 11, and the shock of it, was the need for security, be it personal security at home, security while traveling or security on the job," said Bill Zalud, editorial director of Security magazine.

Companies from a broad range of security segments, including identification technology, airport security and surveillance, posted healthy gains when trading resumed. Visionics Corp., a manufacturer of facial recognition technology, saw its share price soar 226% to $13.91 on Sept. 25, from $4.27 on Sept. 10. ICTS International NV, which provides airport security and other services, saw its share price climb 22% to $20.36 on Sept. 25, from $16.70 on Sept. 10. Kroll Inc., which provides sur-veillance and other security services, saw its share price jump 55% to $11.17 on Sept. 25, from $7.22 on Sept. 10.

Kroll spokeswoman Pat Wood said the company hasnt begun to consider its future marketing direction in the wake of the Sept. 11 terrorist attacks. "Right now the phone is ringing," she said.

Considerations

Some security companies, however, have already begun to re-examine their marketing plans. Some are being aggressive. Others are laying low to avoid any charges of profiteering. And a few providers of airport guards are fighting to maintain their place in a security market that may be vastly changed in the aftermath of the attacks.

Visionics, whose offices in Jersey City, N.J., once had a view of the World Trade Center, didnt hesitate in issuing an ambitious white paper, titled "Protecting Civilization from the Faces of Terror: A Primer on the Role Facial Recognition Technology Can Play in Improving Airport Security."

Joseph J. Atick, chairman-CEO of Visionics, is a U.S. citizen who was born in Israel, where he said he saw terrorism first hand. "The day the event took place, Sept. 11, I was the keynote speaker at a conference for the Biometric Consortium down in Florida," he said. "I was basically outlining the steps against crime and terrorism that we should be adopting in this country. The minute this happened, I hopped a train from Florida, and on the train I put together the white paper based on speeches I had given earlier."

More than profit

Security magazines Zalud said its a mistake to interpret marketing efforts by security companies in the wake of Sept. 11 as motivated purely by profit. "The security industry mission is to secure people and property," he said. "This is what its all about. Its not anybody taking advantage of situations. Theyre just providing information and products now that people are more aware of the need for it."

Iridian Technologies, a manufacturer of iris recognition technology, has no plans to alter its marketing strategy. Currently, the start-up has a media schedule that includes 29 publications. It expects to have plenty of business without boosting ad spending.

"We believe theres enough awareness with whats going on in the media," said Bill Willis, Iridians chief technology officer. "We dont want to look like were exploiting this in any way."

While many sectors of the security industry will see renewed interest, whether they step up marketing or not, one industry sector may evaporate under the heat of intense scrutiny in the aftermath of Sept. 11. The providers of outsourced airport security may find their business legislated out of existence.

"The only logical way is that the FAA [Federal Aviation Administration] take it over. I dont think its too far-fetched to say an agency will be formed that will employ professional people on that level," said Jerry Brandt, principal of Baker-Eubanks L.L.C., a security consultancy. There has been speculation that airport security will be handed over to the U.S. Coast Guard or the Immigration and Naturalization Service.

Securicor plc, which owns airport security company Argenbright Security, is maintaining a brave face. The company said that expected airport security increases should provide "numerous opportunities for further service development," according to Dow Jones Newswires.

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