E*TRADE Head Predicts Death of Full-Service Industry
In recent public appearances, Christos Cotsakos, founder and head of E*TRADE, has predicted that "Traditional brokerages will die a slow, painful death." And "All those branch offices the industry has are going to become fast food outlets, so you might want to think about your career choices."
E*TRADE itself will apparently be the first to make such a strategic switch. The company recently announced plans to expand into various entertainment and on-line merchandising ventures.
Although the company wouldn't elaborate, Cotsakos was recently quoted in an electronics industry publication saying that within three years, the firm expects the firm's trading revenue to shrink to 50% of revenues. The remainder will come from advertising and merchandise sales.
"In on-line," he said, "you never want to be wed to one particular product or service that is as consumed by customer sentiment as securities trading."
According to several industry observers, E*TRADE is using the booming stock market to build a customer base from which it will move into completely unrelated services. Cotsakos himself has said his objective is to make E*TRADE the "supernova of all brands" with which to "leverage many related products and services over the long term."
The company recently rolled out a print advertising campaign with the theme: "The New Financial Community," with the goal of making E*TRADE "more than merely a cybersite for securities transactions," Cotsakos said in announcing the campaign.
"Five years from now," says one competitor, "they may still be around and successful--and have little to do with our industry."
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