The market for online consumer stock trading is set to get more competitive with the launch next week of a zero-commission Web-based trading service, dubbed Zecco.
The venture has been established by Jeroen Veth, 37, a former Merrill Lyynch vice president. He says the Zecco Web site will offer zero-commission trading as of 9 October.
Veth says the site will sustain itself through advertising and by maximising its revenue from interest accrued from margin loans, broker accounts and additional premium financial services.
"We run a lean operation, use the latest technology and rely entirely on word of mouth, guerrilla marketing, viral campaigns and public relations to get the message out," says Veth. "As a result, we can absorb the minimal price of a trade as the cost of doing business and pass the savings on to consumers."
He says the Zecco Web site currently blends financial blogging, discussion forums and financial news "into a seamless web 2.0 experience".
"Think of Zecco.com as the intersection where online brokerage meets Yahoo Finance and MySpace," he adds. "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."
Zecco will also share advertising revenue with users who blog on the site as a way to continually update and improve content.
Big money backers of the venture include early Skype investor Morten Lund, entrepreneur Marcel Boekhoorn, Soren Kenner, former chairman of McCann Erickson MRM Europe and Pier Baarsma, former chief executive of Dutch Coca Cola.