Seven of the largest investment banks worldwide, including The Goldman Sachs Group, Inc. (NYSE: GS), Merril Lynch (NYSE: MER), Morgan Stanley Dean Witter (NYSE: MWD), Salomon Smith Barney (NYSE: C), Credit Suisse First Boston (SWX:CSGN.SW), Deutsche Banc Alex. Brown, and UBS Warburg (NYSE: UBS), announced an agreement Tuesday to create TheMarkets.com, a portal designed to provide information to investors.
The Web site, which will be hosted by application service provider (ASP) Multex.com (Nasdaq: MLTX), will offer equity research, news and market information, as well as direct access to the participants’ Web sites.
Scheduled to launch in the fourth quarter of 2000, TheMarkets.com will use state-of-the-art technology expertise from within the member organizations and from third parties to inform institutional investors at a single Web site.
“The firms developed TheMarkets.com to meet our institutional clients’ needs and desires for easy access to key research and market information on a real-time basis,” said Steven Mnuchin, global head of e-commerce at Goldman Sachs.
“TheMarkets.com’s robust Web-based system and content will help facilitate the investment decision process for our institutional clients,” he added.
Multex’s Largest Deal
All parties refused to disclose the precise terms of the multi-year, multi-million dollar (US$) contract under which Multex will provide technology and hosting for the site. Yet Multex.com president James Tousignant told the E-Commerce Times that it represents “one of the biggest deals” his company has been a part of.
“We’re very proud of the credibility this deal lends us, as well as the financial aspect of the deal,” he added.
Tousignant stated that his firm has “already received a few calls” from other securities firms which, upon hearing today’s announcement, are interested in launching similar sites of their own.
Under the terms of the deal, Multex.com will take a small equity stake in the venture, which is structured as a Limited Liability Company (LLC). TheMarkets.com also plans to obtain a small minority state in Multex.com, currently anticipated to be less than 1 percent of Multex’s common stock outstanding.
TheMarkets.com will also offer a calendar of equity new issue information. With single password, investors will be able to access detailed information on the Web site of a respective firm. Clients, analysts and brokers will be able to personalize the site’s services, allowing them to organize and filter information.
Tousignant said the site will “ideally operate as a hub-and-spoke, where clients come for information and are directly driven to the site of the investment banks as well.”
When accessing TheMarkets.com, institutional investors will be able to review summaries of the content featured on each investment bank’s site, including recommendations, price targets, actual and forecasted earnings estimates, and other key valuation metrics. Market news and data will be linked to other services so that TheMarkets.com can provide trading and news histories when research has been published.
Proprietary research will be augmented with multimedia presentations to enhance content.
“The intent is to eliminate the information overload and provide the clarion view,” commented Don Callahan, managing director of Equity.com, Morgan Stanley Dean Witter.
A client advisory board is in the process of being formed, and a search for a chief executive officer is underway.