A deal with Microsoft did for NetBank what earnings and upgrades couldn't. NetBank (Nasdaq: NTBK) got a boost Tuesday as the company announced it has signed its first major portal agreement, giving it favored positioning, targeted advertising and content integration on MSN MoneyCentral.
Shares in the pure Internet bank, which have been ragged since the company reported its earnings last week, shot up 17 percent, or 3 9/16 to 24. Microsoft shares rose 2 3/16 to 94 5/8.
Last week, the company was initiated with an "outperform" rating by Lehman Brothers, following Wednesday's earnings announcement. NetB@nk said it had an 83 percent increase in net income for the third quarter of 1999 to $1.124 million, or 4 cents a share, compared to $613 thousand, 3 cents a share, for the same quarter a year ago. The bank also reported total assets of $1.03 billion as of Sept. 30.
Under the terms of the one-year MSN agreement, beginning January 1, 2000, NetBank will be one of three financial institutions to integrate content and receive exclusive branding and positioning throughout the MSN MoneyCentral "Banking & Bills" and "Saving & Spending" sections.
The business partnership "offers NetBank a long-term, multidimensional return. NetBank's comprehensive, featured exposure on MSN MoneyCentral will deliver our message to the site's five million visitors each month, who closely parallel the bank's own customers: Internet-savvy, college-educated, working professionals," said NetBank CEO D.R. Grimes in a company statement.
According to market researcher Inteco Corp, the number of households doing online banking is expected to grow from some 4.8 million to more than 10 million by the end of 2001.