America Online, Inc.
today announced a two-year, $75 million marketing agreement with online brokerages DLJdirect Inc., E*TRADE and Waterhouse Securities Inc.
AOL said each brokerage will pay the online service $12.5 million per year during the agreement’s two-year term under which DLJdirect, E*TRADE and Waterhouse Securities become the premier brokerages featured in the new AOL Brokerage and Mutual Fund Centers, part of the AOL Personal Finance Channel.
The companies will be highlighted on the Channel’s main screen, and in the Quotes, Portfolios, Investment Research, Investment Snapshot and Market News sections.
The AOL Brokerage and Mutual Fund Centers allow members to directly access online trading accounts with any of the three brokerages from within the Personal Finance Channel.
In addition, AOL said the brokerages will also be able to offer displays and promote content, trading tools, and services within the revamped channel.
AOL members will also have direct access to DLJdirect, E*TRADE, and Waterhouse through the newly launched Investment Research section which features personal finance content as well as various search tools for stock and mutual fund investment.
Today’s agreement is further evidence of the increasing importance of the online trading medium. AOL claims its finance area generates more visitors than any other resource on its service and that trading via its Brokerage Center grew by 321% from last year.
Jupiter Communications recently predicted that online trading households will reach 31% of the personal investing market by 2002, compared with online banking, which will reach only 19% of the banking market in the same year.
InternetNews.com has learned today that AOL was hoping to sign up a fourth brokerage house for a $12 million a year, two-year term. Other brokers currently online with AOL that won’t be featured as part of the new arrangement include
AmeriTrade, SureTrade, Fidelity Investments, Discover Brokerage and Charles
Schwab & Co. Inc.
Commenting about why Schwab was not involved in today’s deal, company spokesman Tom Taggert said: “The highway is very straight to Schwab. You don’t have to
take detours. We found through our research that our customers don’t use
broker buttons. They go straight to schwab.com. So it didn’t make sense
given our strong brand name.”
Just last week Charles Schwab & Co. Inc. reported that it purchases and sells more than $2 billion in securities each week via its schwab.com Web site.
