Note to Zecco Founders

Hey guys.  You need to hire a copy editor for your site.  There are so many typos and grammatical problems that the site looks amateurish.  The buzz I see that you’re trying to spread is that you plan to “take on E*Trade.” Ummmm, good luck with that. 

According to Om Malik’s GigaOm in a posted dated last Thursday entitled, “Skype backer takes on ETrade with free trades,” Morten Lund, one of Skype’s early funders, is now backing Zecco, a site that will allow free stock trades. 

The site is festooned with blurbs such as this one, which comes from the “About Us” page: “And you can even share your own thoughts. By signing up as myZecco member and contribute your thoughts and ideas. Big or small. You are more than welcome.” The opening page asks the musical question, “Are you interested to join?”

I spent part of last week in Prague, and lived for several years in Japan.  I’m getting a definite “English as a second language” feel from the writing on Zecco.  So a note to the founders and site designers:  People might not trust their money to you if they feel the site looks cheap or quickly cobbled together.  Find someone to clean it up.

As for the ballyhoo about the trades being free, here is my comment posted on GigaOm: “This isn’t a new idea. It’s been done. One of the other pieces of revenue for E*Trade, and quite a few other online brokers, is payment for order flow.

“When you enter a stock or option order, some brokers employ technology that seeks out the best price. Say you entered an order when the markiet is at $10/share. A broker who offers price improvement might find you a trade at $9.98. If you were trading 1000 shares, you just saved $20.

“But other brokers route their orders to market makers who PAY THEM for your order. Why? Because they are either selling from their own inventory, or bumping the price a smidgen and taking it from you. So your order when the market is at $10 might get executed at $10.05.

“Now your “free” order just cost you $50.

“I will cover this topic in more depthy in my Barron’s column (”The Electronic Investor”) in the not-too-distant future.”

As for the community promised in Zecco’s marketing, that’s being done at TradeKing and other sites right now, so that’s not a brand-new idea either.

That said, there are people who look for only low cost when choosing a broker.  They may be attracted to Zecco based solely on the “Free Trades!” campaign.  But they may end up annoyed by the Google text ads sprinkled liberally all over the page.  Once the site is open for business in approximately 280 hours, I hope to take another look. 

Posted by on 09/27 at 03:02 PM

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