HNC Software Inc. said it has formed a strategic partnership with ShopNow.com Inc., an Internet-based shopping mall that hosts 200,000 merchants and one million monthly visitors.

HNC Software develops software that banks and credit card companies use to predict customer behavior.

The San Diego company will sell fraud protection software, e-mail routing, and targeted marketing capabilities to ShopNow.com.

The deal includes an unspecified investment in Seattle-based ShopNow.com, part of an HNC alliance program in which it takes minority equity stakes in its partners.

Mark Wolfenberger, an analyst at Credit Suisse First Boston who covers HNC Software, said the investment buys a front-row seat in an emerging electronic commerce market.

Companies like HNC are more than happy to invest in start-ups if the market shows promise and the start-up is in need of capital, he said. "It makes sense strategically if done smartly," Mr. Wolfenberger said.

HNC, which had $38.9 million of cash at the end of the first quarter, has made similar investments in the past.

For example, it invested $6 million in Open Solutions Inc., a developer of client/server core banking systems; $2 million in Qpass Inc., an Internet-based micro payment processor; and $750,000 in Aim Solutions Inc., which sells software that automates direct-marketing campaigns on-line.

Ward Carey, HNC's vice president of marketing, said that although the investments are nominal, they demonstrate "a higher level of commitment" to such alliances, which leads to more productive relationships.

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