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Non-Tech : Datek Brokerage $9.95 a trade -- Ignore unavailable to you. Want to Upgrade?

To: Paul K who wrote (12248)	5/24/1999 8:27:00 PM
From: RockyBalboa	Respond to of 16892

"Datek gets $300 million in financing and plans to forgo planned IPO" Yeah, that's quite a money..., if they spend it wisely, they really can create a big thing, ie. covering different markets, increasing island functionality and - access.... I believe, if asked, the SI thread had a couple of ideas how to make it really big.

To: Paul K who wrote (12248)	5/24/1999 8:31:00 PM
From: Sir Francis Drake	Read Replies (1) \| Respond to of 16892

OH NO! I don't like this part <<It intends to use the $300 million mainly to expand advertising and beef up its technology, according to Mr. Nicoll.>> I hope that the order in which this is listed: 1)expand advertising 2)beef up its technology - will not come back to haunt us. THERE IS ENOUGH ADVERTISING!!! What Datek desperately needs to do, is concentrate on "beefing up its technology" - make that PRIORITY # 1; forget the advertising. The customers will come - once Datek PERFORMS. Otherwise, you are wasting money - because you'll get bad PR here and on other forums, including mainline media. If you perform, you won't need to spend money on advertising - word of mouth will take care of that. I did not originally come to Datek because I saw and ad. Think again, Mr. Nicoll. Morgan

To: Paul K who wrote (12248)	5/25/1999 11:38:00 AM
From: Tom_	Read Replies (1) \| Respond to of 16892

More on Paul Allen. Datek lands $300 million investments CBS MarketWatch. 3:51 AM ET May 25, 1999 NEW YORK (CBS.MW) -- Broadband, meet the online broker: Microsoft co-founder Paul Allen is taking a stake in Datek Online Holdings. Allen's Vulcan Ventures is joining with a fund from Bernard Arnault, the French businessman who controls luxury goods maker LVMH and Boston's $2.5 billion-strong TA Associates investment fund to pump a total of $300 million into Datek in exchange for a minority stake in the online brokerage. The three will have a seat on Datek's board, said President Edward Nicoll. He declined to specify the size of the minority stake, but said the $300 million will be dedicated toward marketing and technology infrastructure expenditures, and new products and services at Datek. Datek was expected to file for an initial public offering last year, but held back amid questions about the business practices. The online broker, the fourth largest according to U.S. Bancorp Piper Jaffray, was recently fined by the Securities and Exchange for failing to properly segregate customer money. The e-broker also appears to have been the first among its electronic peers to face an SEC fine. The investments by the three funds "indicates the difficulty they believed they faced in going public, considering the company's history," said James Marks, industry analyst at Deutsche Bank Securities. "They found an alternative that's even better and keeps them out of the public spotlight," he added. Nicoll said Datek has no near-term plans for an IPO. Datek began looking for financing sources some three months ago. CS First Boston brokered the deal. The three investment funds, which are coming into the deal together, "believe in our business model," Nicoll said. Datek expects "to take advantage of their expertise" in international marketing and technology. The e-broker "has been spending enormous amounts of money on customer acquisition, and it's not clear how successful they've been in attracting customers who are that wealthy or very profitable," Frank Lallos of Gomez Advisors, a consultant which has worked for Datek in the past. The industry's marketing average is running at about $250 per account, he said. Gomez estimates Datek is spending some $200 per account. Datek rivals include Schwab, Fidelity Investments, E-Trade, Ameritrade , DLJDirect and Morgan Stanley Dean Witter's Discover. Allen's investments in broadband technology are also of interest to Datek, Nicoll said. "The broadband aspect to this is very intriguing," Marks said. Allen's cable assets are linked into "a huge swath of households ... If cable winds up winning, (Allen's) got the chance to deliver Datek a pretty significant portion of U.S. households." Vulcan Ventures has a controlling stake in go2net, which operates the popular Silicon Investor chat site. The fund has also spent $9 billion on Marcus Cable, Charter Communications and portions of InterMedia. "Silicon Investor, together with Datek, could create a pretty powerful financial portal, and then you add all the broadband potential." said Lallos. By extension, the three funds will also have ownership in Datek's fast-growing Island ECN, an electronic network that matches trades in Nasdaq Stock Market stocks. Datek owns 87 percent of Island, which has filed with the SEC to become an exchange. Island's beginning a pilot this week to trade two New York Stock Exchange listed securities, CBS.MarketWatch has learned. Toronto Dominion's already announced an investment in Island in exchange for a stake, and Nicoll expects Datek will announce further equity-based deals. Waterhouse was the third largest online brokerage in the first quarter, according to Piper Jaffray. Datek expects to maintain some ownership in the ECN after it becomes an exchange, he added. ~~~~~~~~