Looks like E*Trade (Nasdaq: EGRP) wants to be an online media company, as well as an online broker. So it seems, based on Monday’s announcement, in which E*Trade announced the acquisition of privately-held financial analysis Web site ClearStation.
ClearStation includes stock market charts and message boards, and links to notable headlines from news services such as TheStreet.com and CBS Marketwatch. Shares of E*Trade closed up 1-78 to 59-3/4 on Monday.
E*Trade’s New Media Goal
ClearStation will be operated as a subsidiary of E*Trade through an independent Web site, after the deal closes. An acquisition price was not revealed, but the transaction is expected to be accounted for as a pooling of interests.
“E*Trade’s objective is to become more than a market leader in online investing services,” said Christos M. Cotsakos, chairman and CEO of E*Trade. “Our goal is to become a premier digital financial media company. With a top-rated web site, exceptional talent and a proprietary technology platform, ClearStation represents another important step in executing on our new media strategy and in building our interactive financial media properties.”
The Next Fool or Bull?
ClearStation’s Web site was launched in July 1998, and the company says it has approximately 90,000 registered members. The goal seems to be to build a large online community with active message boards about the financial markets, thus creating a “sticky” site where users spend a lot of time. Other leaders in this category include Motley Fool and Raging Bull.
ClearStation could become a formidable foe for these sites, because of E*Trade’s impressive reach. E*Trade’s Web site is the most popular destination for online traders. According to Media Metrix, E*Trade’s site was more visited in February than Ameritrade and Charles Schwab combined.
“Our combination with E*Trade provides ClearStation with tremendous brand association and the potential to reach a global base of independent investors who turn to E*Trade and its international affiliates for financial content and services,” said Kris Skrinak, president and CEO of ClearStation.
However, sites like the Motley Fool and the Raging Bull also include rich original content, produced by a staff of writers and editors. For now, ClearStation only provides links to other financial sites for news and commentary.