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Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel? -- Ignore unavailable to you. Want to Upgrade?

To: noiserider who wrote (19655)	7/30/2002 1:32:32 PM
From: StocksMan	Read Replies (1) \| Respond to of 20297

Another interesting article on Metavante's purchase of Spectrum's assets I found this statement particularly intriguing: [Metavante will not acquire Spectrum's employees, although it might offer jobs to some of them, the Metavante representative said.] StocksMan ========================================== Bill-pay contender buys rival's assets By Troy Wolverton Staff Writer, CNET News.com July 29, 2002, 2:00 PM PT update Online billing company Metavante has agreed to acquire the assets of Wells Fargo-backed rival Spectrum EBP, the companies announced Monday. Metavante will get Spectrum's software technology and business relationships under the deal, Metavante representatives said. The company is paying for Spectrum assets in cash, said a Metavante representative, who declined to give more financial details of the agreement, which the companies expect to close in August. Spectrum technology focused on a software "switch" that tied together online payments with online bills. By buying Spectrum, Metavante will be able to integrate its consumer and enterprise bill payment services so that consumers will be able to view and pay bills solely using Metavante's services. "We identified this as one of the key aspects that we needed," said Hans Myklebust, vice president in Metavante's electronic presentment and payment division. Spectrum representatives did not return calls seeking comment. Metavante, whose chief rival is bill payment provider CheckFree, has been on an acquisition streak of late. Earlier this month, Metavante agreed to acquire Paytrust, another provider of online billing and payment services. Last year, the company picked up CyberBills and Derivion. Through each of the mergers, Metavante gained each company's relationships with banks and other billers. CheckFree doesn't feel threatened by Metavante's string of acquisitions, said Terrie O'Hanlon, executive vice president of marketing at CheckFree. The company already offers an end-to-end bill payment and presentment system similar to what Metavante is trying to develop. Meanwhile, CheckFree has signed up about 254 billers for its bill presentment services, O'Hanlon said. In contrast, Metavante said it has signed up only about 170 billers, including those acquired through all the company's acquisitions and pending acquisitions. "Our transaction volume is so much greater than Metavante," O'Hanlon said. "We believe we have the scale and will continue to protect our leadership there." Spectrum was founded in 1999 by Wells Fargo, Chase Manhattan (now JP Morgan Chase) and First Union (now Wachovia) to compete with CheckFree and other companies that act as middlemen in ushering online payments between banks and billers. Although the company later received backing from eight other major banks and contracted with Sun Microsystems and Netscape to build its billing system, it never posed much of a threat to CheckFree. Many of the banks and billers maintained their relationships with CheckFree and Metavante. Spectrum failed to get industry adoption for its services because of its consortium ownership, said Avivah Litan, an online banking and payments analyst with research firm Gartner. Spectrum had "weak" technology, and its bank owners were only half-hearted about supporting the company, she said. Metavante's acquisition is more about gaining Spectrum's relationships with its founding banks than about picking up its technology, according to Litan. "If you add it all up, it makes Metavante a much more viable competitor with CheckFree in the (online bill payment and presentment) space," Litan said. "This solidifies their relationships with these banks." Metavante already has good, existing relationships with Spectrum's founders, but the prospect of picking up Spectrum's contracts and extending Metavante's relationship with them was part of its motivation for buying Spectrum's assets, said Tim Patneaude, also a vice president at Metavante's bill presentment and payment division. "That certainly was a big part of what we talked about," Patneaude said. "We felt that this was a natural extension of our relationships with them." Metavante will not acquire Spectrum's employees, although it might offer jobs to some of them, the Metavante representative said. Banks have spent decades and billions of dollars developing their online banking services. In recent years, a growing number of consumers have started to adopt online bill payment services, although many of them are choosing to view and pay their bills directly through their credit card, telephone and utility companies rather than through their banks. news.com.com

To: noiserider who wrote (19655)	7/31/2002 11:58:30 AM
From: m_korn	Respond to of 20297

Noise, I don't understand why this isn't being viewed as a big win for Checkfree. There are now only two main ebill providers in the US (world?) and Checkfree has what 70% or 80% of the market. I have been following this market for 10 years and I have watched a number of competitors to Checkfree line up and get knocked down. It seems the press loves to predict the demise of Checkfree but to me market share tells the real story. S The best part about this deal is that Spectrum has went from a money losing consortium to a for profit enterprise. Now Medavante needs to provide dial tone quality service at a competitive price. Not to mention having to provide a feature set and distribution comparable to Checkfree. No one has been able to do it so far. What about the agreements that members have signed w/ spectrum? Are banks somehow going to trust another bank more that Checnfree. At this point they seem meaningless. What are your thoughts? K