Fri Apr 26, 4:57 PM ET

NEW YORK (Reuters) - Shares of VeriSign Inc. plunged to their lowest level since November 1998 on Friday, a day after the security and Web address provider posted first-quarter revenue below estimates, lowered its guidance for the second quarter and cut 10 percent of its staff.

By the market close on Friday, VeriSign's stock had lost more than 45 percent, or $8.35, to close at $9.89 on the Nasdaq, wiping out about $2 billion of the company's market value.

VeriSign, which according to a securities filing had about 238 million common shares outstanding as of March 22, was the second most active issue on Nasdaq.

"The sustained technology downturn definitely caught up with us," Stratton Sclavos, VeriSign chairman and chief executive, told analysts in a conference call after the markets closed on Thursday, citing a contraction in its Web domain name business which provides addresses for Internet sites.

VeriSign posted a wider net loss on revenues of $328 million, which fell short of analysts' estimates despite being up from the comparable quarter last year. It also cut its second-quarter earnings outlook and said spending visibility was so bad it could not provide guidance for the full year.

The bad news prompted several analysts, including Morgan Stanley, J.P Morgan, U.S Bancorp Piper Jaffray and Goldman Sachs, to downgrade the stock and lower their second-quarter and full-year earnings outlook.

Merrill Lynch said it cut its stock rating to a "near-term hold" from a "near-term buy," to reflect cloudy outlook in the company's Internet address name business.

"While we continue to like the franchise VeriSign has built, the push out in recovery of the domain name business and subsequent corporate restructuring will likely prevent VeriSign's stock from outperforming the market," J.P Morgan analyst Sterling Auty said in a research note.

U.S Bancorp Piper Jaffray analyst also pointed to the multitude of acquisitions VeriSign has made as something potentially holding the company back.

"Having acquired one public and 12 privately held companies over the last five quarters, integration of these companies is not an insignificant undertaking," he said.