A passing positive reference for TWE in this week's Barron's.
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E*Trade, which is on a stated mission to spend itself into the red (just temporarily, it hopes) to make its brand ubiquitous, laid out $257 for every new account added in the first quarter, according to CSFB's Burnham, erasing whatever profit it would have made on the new customer, along with existing ones. That compares with $135 for industry leader Schwab, $185 for DLJdirect and $84 for TD Waterhouse. Ameritrade, cognizant of the long-term hazard of this profligacy, has curtailed some ad spending to stay in the black.
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At a minimum, a shakeout may be on the way for the online brokers, one that will see the dozens of marginal players scurry for crumbs, sell themselves or simply leave the game. Meanwhile, the established giants -- Schwab, E*Trade, Fidelity, Waterhouse -- will likely consolidate their market positions and gravitate toward niches or try to become omnibus gateways for all financial services. DLJdirect, for instance, is staking out the high end, targeting more affluent investors. Schwab, of course, is continuing to bundle together a world of research, mutual-fund offerings and other services to enrich its menu and fashion a virtual full-service firm with third-party providers.
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Whole story for subscribers at: interactive.wsj.com
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