Security First Technologies said Friday it has agreed to buy 10-month-old VerticalOne Corp. for $166 million in stock, a move that company officials said would help banks better compete with Internet financial portals.

The acquisition, the Atlanta-based company's third this year, further shores up its position as the dominant provider of Internet banking software and outsourcing services, and sheds light on where it believes competitive threats for banks lie.

Privately held VerticalOne, also of Atlanta, sells a service that lets organizations build "destination sites" by helping them aggregate and organize information from other content providers. The service lets consumers get personal information, such as credit card balances, travel rewards, household bills, e-mail, and bank statements, through the VerticalOne-supported destination site, without the hassle of logging onto multiple Web sites with different passwords.

"The key for financial institutions is to get people to come to their site on a regular basis," said Robert Stockwell, chief financial officer at Security First, which soon will change its name to S1. VerticalOne would provide banks with "an additional point of stickiness to keep customers at their site," he said.

S1 will issue 3.86 million shares of stock to acquire VerticalOne. Its shares fell 4% last week, closing Friday at $37.875.

The pairing of VerticalOne and S1 is cause for alarm among Internet portals with financial aspirations, such as Yahoo Finance, Intuit Inc., and America Online, said Avivah Litan, director of research at GartnerGroup.

VerticalOne is "commoditizing what Yahoo and (Intuit's) Quicken are doing," she said.

VerticalOne has about 10,000 people using its service through various destination sites, according to Mr. Stockwell. These sites include BellSouth Buzz,, Cox Interactive Media, Planet Direct,, DoubleClick, and USA.Net. VerticalOne has been soliciting the largest U.S. banks to become destination-site partners, as well.

About 100 organizations, including several of the 20 largest banks, have agreed to provide information through the VerticalOne destination sites. VerticalOne hopes to become partners with more than 600 information providers by April, Ms. Litan said.

Robert Martin, an analyst at Friedman, Billings, Ramsey & Co., said that S1, which provides software and services to more than 100 financial institutions, "can now start selling its services to financial institutions that can integrate onto large destination sites."

He added that S1's customers "have realized that they can't all be destination sites, so they are basically looking for ways to pull the services into a greater offering. VerticalOne has been doing just that."

VerticalOne, which has 81 employees, would become a subsidiary of S1 Corp. headed by Gregg Freishtat, VerticalOne's chairman and chief executive officer.

S1 would distribute the VerticalOne software to its bank customers, banks that use other front-end Internet banking software, and to other corporations, including Internet portals.

The VerticalOne agreement caps a busy week for S1, which announced on Wednesday that it had wrapped up its agreement to buy FICS Group NV, a Brussels-based developer of retail and corporate Internet banking software. The $395 million deal, which could be worth as much as $556 million if certain financial targets are met, was renegotiated because shares of S1 had fallen more than 25% since the deal was announced on May 17. Also, in May, S1 said it would buy Edify Corp., a Santa Clara, Calif.-based Internet banking software provider, for $345 million in stock.

All three deals are expected to close in the fourth quarter.

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