Zecco To Offer Free Stock Trading - Threat to Online Brokers

A former Merrill Lynch vice president says he will offer zero commission online stock trading in 2 1/2 weeks. His Web site, Zecco.com, currently offers news, charts, blogs, and discussion forums. Trading is due to begin Oct. 9th.

Jeroen Veth said Zecco.com will sustain itself through advertising. "We run a lean operation, use the latest technology and rely entirely on word of mouth, guerilla marketing, viral campaigns and public relations to get the message out," he said in a news release.

“Think of Zecco.com as the intersection where online brokerage meets Yahoo Finance (YHOO) and Myspace (NWS)," he continued. "We believe investors want to share ideas and opinions – and we want to make it possible for anyone – customer or not – to do that on our Web site."

Other backers of the venture include Morten Lund, an early investor in Skype (EBAY) and Pier Baarsma, former CEO of Dutch Coca Cola.

"We are unusually well financed for a startup and I believe the ‘big boys’ will pretty soon realize they are in for a serious fight," Veth added in his statement. Thanks for the tip, Om Malik.

Disclaimer: I own shares of Yahoo.

Comment on this article

Comments

[jolly singh:]

short AMTD ET etc etc???

2006 Sep 21 04:34 PM

[Christopher...:]

Ad supported trading??...I've seen everything now. I guess eTrade won't be a big advertiser...

2006 Sep 21 08:49 PM

[David Jackson:]

Wells Fargo has been offering free trades to some of its customers for a while (see Wells Fargo aims at Schwab, TD Waterhouse, Ameritrade, E*Trade).

It doesn't seem to have had much effect yet. Perhaps once trades get to a certain low price, other factors may become more important: website functionality, execution, spread, and integration with banking.

2006 Sep 22 01:23 AM

[Mr Perkins:]

This is the kind of "bell" that gets rung at major market tops. <i>The <b>Silly Season</b></i... as it's sometimes called. The question, of course, is "Will anyone hear it?"

2006 Sep 22 10:33 AM

[Mr WaveTheory:]

Zecco - Is "Free" a Business Model?

The hot startups today all seem to have one thing in common today - they all have "FREE" as a business model. That is why when I read about Zecco.com, the free online stock trading site backed by the funder of Skype, my eyes rolled over. Have I heard this story before or what? Once and for all entrepreneurs, I would like to address the question that is on every Web 2.0 entrepreneur's mind: Is "FREE" a business model?

2006 Sep 22 01:18 PM