Mimicking the general market, Web-focused bank technology vendors' stock prices took a beating in 2000, while investors generally showed more confidence in the industry's more familiar tech providers.

Of 46 public companies tracked from April through December by Computer Based Solutions Inc., a bank consulting firm in Dallas, only 14 had stock price gains. Of those, 12 were what the consultant's president, M. Arthur Gillis, called mainstream outfits with business plans based on traditional economic models.

Those on the good list included CheckFree Corp., founded in 1981; Fair, Isaac & Co. Inc., 1956; Bisys Group Inc., 1989, Jack Henry & Associates Inc., 1976; and Equifax Inc., founded in 1899.

Though not all of the decliners are brand-new companies, they have in common a focus on Internet banking software and/or services - and steep stock-price declines in the eight-month period:

Homecom Communications Inc., which sells Internet-enabling banking software, plunged 98%; S1 Corp. 88%; Cybercash Inc. 80%; Online Resources Corp., a banking and bill payment service provider, 79%; and Sanchez Computer Associates Inc. 44%.

Mr. Gillis predicted that 10 of the 46 companies on the list will "either evaporate or be sucked up by some other company" in 2001 and that five will merge with other companies for "healthy reasons."

One prediction for the new year is easy: There will be plenty of bank money to go around. Banks are highly dependent on technology, spending 10% to 18% of their operating budget on it, Mr. Gillis said. "That is a nice chunk of money."

The ravaging of Internet banking tech stocks "is a microcosm of what happened to the Nasdaq as a whole," Mr. Gillis said. "The market finally woke up to the reality that the price escalation of a year ago was far out of reasonable proportion."

Investors have returned to fundamentals in their valuations, he said. "The pattern over the last eight months was that companies with long, consistent track records that followed the basic business model we learned in Economics 101 - make a profit - fared much better."

The new technology companies were more interested in "building mass" by hiring employees and acquiring other companies, Mr. Gillis said. "But no one thought about how to pay back stockholders," he said.

Kevin J. Dyches, an analyst with Prudential Securities, said established companies have several advantages over those reliant on venture capital funding.

"Banks will look at a vendor as if they are making a loan to them," Mr. Dyches said of the start-ups. "They ask: 'Are they going to be around? What kind of revenues do they have? What kind of cash flow?' The longer you've been in the business, that's a positive for you."

To banks considering a technology purchase, a vendor's cash flow is just as important as its product features, Mr. Dyches said.

Rajeev Agarwal, director for commercial banking at the TowerGroup research firm in Needham, Mass, said outsourcers such as Bisys and Fiserv Inc. rely on recurring, fee-based revenue. These types of companies have become more attractive than those limited to one-time software licensing income such as Cybercash and Sanchez, he said.

"The share of revenues that are fee-based, which is a more stable revenue stream, is a key measure of a company's future market evaluation," Mr. Agarwal said. "You have to look at this from couple of different perspectives: What is the revenue model? What are the adoption rates that support that revenue model?"

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