CALABASAS - Wall Street cheered Digital Insight Corp.'s newalliance with Microsoft Corp., driving the company's stock up 8percent Wednesday.
Shares of the online banking programs developer closed at $17.25,up $1.33, following the announcement that it will co-market its openfinancial exchange software with Microsoft.
The two had worked together in the past to encourage Digital'sbanking customers to support Microsoft Money for online financialtransactions, but the arrangements had proved unwieldy. Wednesday'sdeal allows banks to go directly through Digital, strengtheningrelationships on both sides.
"They're trying to get as many institutions as possible to signup on Microsoft Money," said Michal Geller, Digital's seniorproducts manager for Internet banking services. "Now, they get 1,624institutions in one fell swoop. For them, that's a big deal, and forus, the product gets better and easier to implement."
Previously, a bank would have to sign two separate contracts withboth Microsoft and Digital to allow users to use Money to manageaccounts online. Though mainly a procedural shift, the deal has thelarger benefit of solidifying Digital's partnership with thesoftware giant. Geller said the two were currently discussing otherways to work together in the future, though no specifics had beensettled upon.
The news came at a volatile time for Digital Insight's stock. Itfell 8 percent on May 23 after President John Dorman's decision tostep down, then rebounded, sharply fell again in early June, thenrose steadily to its Wednesday close.
Though he didn't put all the weight of Wednesday's rise on theMicrosoft announcement, analyst Andrew Jeffrey of the Menlo Parkoffice of the brokerage Needham & Co. said the firm is on the rightpath.
"The business is actually doing better than I would haveanticipated four to six months ago, which the stock reflects,"Jeffrey said. "They continue to execute better than thecompetition."
No comments:
Post a Comment