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Seeking fatter profits, this online-trading trailblazer is taking to thin air. With a long-term strategy in place, the company is betting heavily on wireless.
Say you're a member of Generation X with cash to invest. Chances are you'll pass by old-guard firms such as Charles Schwab & Co. and Fidelity Investments in favor of E-- Trade Group, the hip poster child of online trading. This is definitely not your father's investment house.
Since October, E-Trade customers have been able to transfer funds between E-Trade Bank and E-Trade Securities accounts, check account balances, and pay bills using their Web-enabled phones or PDAs. A customer can also use a Web-enabled device to locate the nearest of E-Trade's 9,600 participating ATMs by entering a ZIP code. E-Trade officials tout these capabilities as proof of the company's commitment to provide customers with wireless management of their accounts. In fact, officials say E-Trade's goal is to become the No. 1 all-electronic financial-- services player. The company has $66 billion in customer assets, with a base of 2.6 million accounts and 1.7 million new accounts in fiscal 2000, according to E-Trade.
"The company's strategy is ... to enable consumers ... and give them the freedom and power to manage their finances electronically, without an intermediary, and wireless fits perfectly into that strategy," says Josh Levine, E-Trade's CTO. "The real picture is ... to have connectivity to your finances 24 hours a day, anywhere and anytime."
But the picture isn't entirely rosy. Last year, the stock prices of dot-- coms tanked, and the pure-play Internet model continued to show cracks. E-Trade was not immune-- it posted a 52week high of $36 per share, but as of press time, was trading near $8.
Still, some analysts approve of the company's model: Jupiter Research expects the U.S. wireless subscriber base to exceed 100 million by 2003, and analysts at Robertson Stephens predict that by 2004 nearly 90 percent of Internet users will routinely access financial content. This bodes well for E-Trade.
Indeed, since E-Trade began offering Internet trading in...