Rather amazing. No one here or on Yahoo!'s board listened to the call. Whatever.
Here's a snippet from Forrester Research gleaned from the Yahoo! SONE board:
S1 Assembles Net Banking Juggernaut
May 17, 1999
Security First Technologies (S1) today announced that it is acquiring Edify Corporation and Belgium-based FICS Group N.V. for approximately $1.4 billion in stock. S1 also announced a strategic alliance with Intuit in which S1 gets an 18-month exclusive deal to integrate Quickbooks and TurboTax software into financial institutions' Net applications.
by Brook Newcomb with Bill Doyle
Forrester believes that this is a watershed event for the on-line financial services industry.
S1 has formed the clear category leader in Internet banking. With this deal, S1 adds Edify's strengths in NT-based, on-premise solutions and FICS' expertise in international operations and large corporate banking solutions. Despite the significant challenges ahead in integrating three different philosophies and business models, the new S1 will be an assemblage of A list players that, working together, are likely to find a winning solution.
This deal will trigger a flurry of new M&A activity. Internet banking has been a land of Lilliputian vendors, all of whom will now need to react to this new Gulliver. Point solution providers such as Corillian, Destiny, Home Account Network, and Spherys must either combine forces or be bought. For Integrion, this deal represents another nail in the coffin.
Another heavyweight will weigh in. S1 has identified an attractive strategy: on-line banking as a wedge into the entire enterprise. New front-end solutions for home banking will, in time, envelop call center applications, customer profiling systems, and even branch platforms. Forrester believes that at least one large technology vendor to the financial services industry will focus on this opportunity: look for an IBM, Oracle, Sun, or First Data to make selected acquisitions.
And another from Atlanta:
May 19 (The Atlanta Journal and Constitution/KRTBN)--The gold, analysts say, is in the visitors and in the code.
To make money on the Internet, you must bring people to your Web site or write code that creates software that makes Web sites worth visiting.
Security First Technologies took a big step this week toward being the software company that banks turn to when they want to set up shop online.
The Atlanta company announced Monday it will use about $1.4 billion in stock to buy two of its competitors: Edify, in Silicon Valley, Calif., and FICS, in Belgium.
"We are the infrastructure. We are the Cisco of our world," said James "Chip" Mahan, Security First chief executive officer, referring to Cisco Systems, the company that makes the pipes through which much of the Internet's information flows.
The deals create a company with about 1,500 employees, to be called S1. The deals require approval by Edify and Security First shareholders. They are expected to be completed by October.
The new Atlanta-based company hopes to dominate the market for software that lets people, small businesses and corporations handle their money on the Web.
Security First competed with Edify in retail and small-business banking markets. FICS sells online banking financial reporting software to banks.
The international market for retail Internet banking software was $500 million last year, according to Dove Associates, a Boston-based management consulting firm. But analysts say the market is just getting its legs. Dove expects it to grow by 40 percent per year, reaching $2.7 billion by 2003.
"There is lots of opportunity out there and now there are that many more people working to put it out to market that much more quickly," said Steve Franco, an analyst with U.S. Bancorp Piper Jaffray.
Franco said the relative newness of the online banking market is "why it makes sense to consolidate now instead of competing head-to-head as they all keep expanding."
Mahan said he started working on the deal six weeks ago. He considered a second public offering, then called FICS when he heard it was thinking about going public.
"The thing I struggled with is I'm not a spring chicken anymore. I'll be 48 next week," he said. "Today, S1 could be a real powerhouse. But I figured, let's just go for it. With this move, I don't think you can catch us."
"That's the way the software business works," he said. "There's a big, big winner and everybody else."
Security First Technologies grew out of a family get-together in 1993. Mahan was a banker, operating Cardinal Bancshares, based in Lexington, Ky. Mahan's brother-in-law, Michael McChesney, ran SecureWare, a security software firm. At the gathering, Mahan and McChesney decided to put a bank on the Internet.
Security First Network Bank was the result. Launched in 1995, it was the first Internet bank, but it was not profitable. Last fall Mahan sold the Internet bank to Royal Bank of Canada for $20 million. The remaining software company was called Security First Technologies. Royal Bank is now a customer of Security First, paying $50 million to put banking services online.
Security First Technologies is based in Buckhead, near Lenox Square mall. The company also has a 50,000-square-foot data center in Norcross, Ga. A 72,000-square-foot expansion of the facility is scheduled for completion by August.
Gartner Group's Avivah Litan said the companies that will do well in the technology field will be ones that possess either the customers or the software.
"Security First is a very hot-to-trot company," Litan said. "Hot, fast-moving and very innovative."
Investors have agreed, sending Security First's stock up 228.7 percent so far this year.
But they have not yet decided what to make of this week's acquisitions. Shares of Security First dropped Tuesday for the second straight day. Shares closed at $50.12 1/2, down 87 1/2 cents.
By Mark Clothier
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Visit The Atlanta Journal and Constitution on the World Wide Web at ajc.com
Meanwhile, another guest joins the party late:
biz.yahoo.com
Cheers, Tuck |
