Check out the VentureBeat story. Zero commission trading?!
This smells to me like it's going to be huge. There is nothing more exciting than technology catalyzing the demise of an obsolete business model. The best part is, the consumer wins in the end (well, the consumer and whoever was smart enough to get in on this deal).
Their business model is to absorb the real cost of the trade, which is about $2, though often inflated to $10 and above by E*TRADE, Ameritrade, and the like. They view that essentially as a user acquisition/retention cost. I assume their revenue will come largely from advertising, but I also suspect that the rich, deep user data they'll be able to cull from portfolios, trades, user generated content, and so forth will be monetizable in other ways. They will open the floodgates in a couple weeks, building an immersive and participatory media environment around what is sure to be a formidable audience.
I love everything about this model. Users are going to love them, advertisers are going to love them, and they've got a business model more sophisticated than 99.9% of the rest of the so-called Web 2.0 companies. They're well-funded, to boot.
Check out the website. Even as it stands now, Zecco is to Google Finance as Google Finance is to ... well, Yahoo Finance. If they can figure out a way to do a deal with Seeking Alpha (who have a pretty interesting business model of their own), that would be very cool.
Of course, that may not happen. Seeking Alpha just signed a deal with Yahoo, and Zecco is clearly competing with Yahoo here. But they've got the right attitude. From a press release...
The disruptive business model offered by Zecco.com is further augmented by a website that blends financial blogging, discussion forums, financial news updated and trading into a seamless web 2.0 experience.
“Think of Zecco.com as the intersection where online brokerage meets Yahoo Finance and Myspace. 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 website. We offer not just free trading but also free blogging, free forums and the chance to connect and share with other investors and netizens. In fact we even offer to share advertising revenue with users who blog on our site” explains mr. Vlet.
I just booked my tickets back to Boston for the Harvard Yale game and Thanksgiving. I am psyched!
I love the indian summer.
