E*Trade aims to triple accounts with new Web site
Reuters Story - September 10, 1998 19:04
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NEW YORK, Sept 10 (Reuters) - Helped by actors, a television sportscaster and a basketball star, the Internet broker E*Trade Group Inc. Thursday started to promote its revamped Web site, with which it hopes to triple its trading accounts to 1.5 million.
E*trade, which pioneered Internet brokering and ranks as the No. 2 cyberspace broker, aims to turn its Web site into a so-called portal, where people in search of financial information will first turn. The Palo Alto, Calif., based brokerage will spend a whopping $150 million in the next 12 months to promote the site, which is likely to cause the firm to post losses in the foreseeable future.
"The next eight quarters we intend to lose money," E*Trade's chief executive, Cristos Cotsakos, told an audience of reporters and analysts on Thursday. Cotsakos, however, later backtracked, saying that the firm could break even, or possibly post a profit, if the marketing campaign proved successful.
People have flocked to Internet brokers in the last two years, drawn by low commissions, which can be as little as $5 a trade, and faster trade executions and processing -- although some cyberspace brokers have reported system glitches recently. Internet brokerages are expected to have some five million accounts by year-end with more than $200 billion in assets.
E*Trade's revamped Web site -- which features more research, message boards, real-time quotes and other gadgets -- is intended to entice one million people to open trading accounts with E*Trade over the next two years.
The formal launch, which took place at a Manhattan theater, was accompanied by actor sketches, and performances by NBC sportscaster Bob Costas and basketball player Shaquille O'Neal of the Los Angeles Lakers by teleconference.
E*Trade has given Costas and O'Neal $100,000 in "funny money" in a trading contest ending October 31, the winner of which will receive $50,000 from the firm to give to his favorite charity. O'Neal, whose portfolio consisted of technology stocks, such as Dell Computer Corp. , was certain to win, boasting: "You're going to lose, Bob; nobody E*Trades against me."
E*Trade's publicity splash also entails two-page advertisements in publications such as the Wall Street Journal and the New York Times, television commercials, and a direct mail campaign to one million prospects.
Among other things, E*Trade aims to persuade some of the 10 million people who check stock prices on the Internet to start trading there as well. The firm, which recently passed the 500,000 mark in trading accounts, is on track to sign up an additional 80,000 accounts this quarter, Cotsakos said.
"People are concerned about two things these days -- their health and their wealth," Cotsakos said, adding that E*Trade aims to become the premier builder of the latter.
((--Jack Reerink/New York Newsdesk (212) 859-1725, fax (212) 859-1717--)) |
