CheckFree shares drop on user numbers
By Bloomberg News
Special to CNET News.com
January 7, 2000, 11:00 a.m. PT
NEW YORK--CheckFree Holdings shares fell as much as 19 percent after an analyst said its Internet bill payment service with Yahoo isn't attracting as many consumers as expected.
Shares of Norcross, Ga.-based CheckFree, which routes bills between companies and consumers on the Web, fell 8.38 to 77.25 in early afternoon trading of 3.4 million shares, triple the daily average of the last three months. Earlier, they fell as low as 69.75.
Salomon Smith Barney analyst Richard Zandi said fewer consumers than he expected used the CheckFree bill payment service on Yahoo in its first three months, despite a three-month free trial offer to new customers. Yahoo in September began allowing its 105 million users to pay bills online through CheckFree, and last month it introduced a service to let consumers receive bills over the Internet.
"Consumers aren't clamoring to pay their bills online" on Yahoo, Zandi wrote.
The CheckFree-Yahoo service attracted 107,000 visitors in September, its first month of operation, 48,000 in October and 117,000 in November, according to Media Metrix, which tracks Internet traffic.
Zandi said he now expects CheckFree to lose 44 cents a share in fiscal 2000, more than the 36 cents loss he predicted earlier. He said the company's pending $250 million acquisition of BlueGill Technologies would reduce earnings at first.
"I don't know what (Zandi's) expectations were, but those numbers are not disappointing from CheckFree's perspective," said Terrie O'Hanlon, a company spokeswoman.
O'Hanlon added that Yahoo is only one of 59 sites where consumers can pay bills online using CheckFree's service and that it's still "early" for Yahoo.
CheckFree shares soared 347 percent last year, partly on optimism about its Yahoo partnership and deals with other Internet sites. The stock has declined 26 percent so far this year--along with many Internet companies.
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