Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : e-Commerce the Next 100 Months...... -- Ignore unavailable to you. Want to Upgrade?

To: Toni Wheeler who wrote (2714)	9/20/1999 4:13:00 PM
From: AugustWest	Read Replies (2) \| Respond to of 2882

J.B. Oxford offering Internet access Other e-brokers seen mulling move to build accounts By Emily Church, CBS MarketWatch Last Update: 1:18 PM ET Sep 20, 1999 Also: NewsWatch NEW YORK (CBS.MW) -- J.B. Oxford on Monday became the first of the larger discount brokerages to dangle "free" Internet access before account holders in an attempt to draw more brokerage and banking customers to its Web services. Other e-brokerages are believed to be mulling a similar move. Today on CBS MarketWatch U.S. stocks close higher CMGI to acquire AdForce Computer Sciences bids $400 million for Nichols Research VoiceStream wireless to buy Aerial Communications Thom Calandra's StockWatch: OPEC as a cartel is back More top stories... CBS MarketWatch Columns Updated: 9/20/99 4:00:22 PM ET The brokerage said it would provide Net access through its own Internet service to customers who keep a minimum of $2,000 in cash in their demand checking account with the firm. See statement. J.B. Oxford's stock (JBOH: news, msgs) rose 5/16, or 4 percent, to 7 3/4 on the news, though it's lost about half its value since early July (see chart below). Its larger peers in the online space, Charles Schwab (SCH: news, msgs), E-Trade (EGRP: news, msgs) and Ameritrade (AMTD: news, msgs), to name a few, were slightly higher. The J.B. Oxford package, called an Npower account, includes online banking services, bill payment at 25 cents a bill and an ATM card. The new service marks J.B. Oxford's first foray into online banking. More services may be rolled out later, said Chris Jarratt, chief executive of J.B. Oxford Holdings. The firm, he said, is mulling buying a bank for a charter that would allow it to offer loan services. At what cost? "Frankly, I'm surprised that some of the bigger firms haven't done a deal like this. Internet access is going to become a commodity," said Dan Burke, analyst at Gomez Advisors, a consultant. "We'll see movement in this direction. J.B. Oxford is not a threat to the big ones yet, but they'll be watching to see if the customers are going to jump on board." The cost of adding more services like free Net access could be holding some of J.B. Oxford's larger rivals back. Aggressive attempts to gain new accounts and more assets to manage has driven marketing costs to an average $250 to $300 per account in the industry, according to Gomez. J.B. Oxford's account acquisition costs fall within the industry range. Jarratt said he's "not concerned that (the marketing) costs will eat into margins." The firm has earmarked $10 million in the fourth quarter for its ad campaign for the Npower offering. "We're hoping that (account growth from the offering) will drive those numbers down," he added. Running the numbers U.S. Internet access is running at about $20 per month as a rule. E-brokers offering free access service would be betting that asset growth would offset the ISP costs they take on. J.B. Oxford said it will charge customers $15.95 a month for the service if they fall short of the $2,000 minimum. Meanwhile, analysts say revenue from commissions are flat amid softer trading volumes. "Everyone wants everything for free on the Internet," Burke said. If the customer response "is robust enough, it could be helpful for J.B. Oxford. If everyone jumps on it, the deal's a moot point." For the brokerages, Burke added, high-end tools and services are also becoming key retention tools.