I learned some interesting things about online brokerages the other day, from a Keynote Systems (NASDAQ:KEYN) study of how prospective online-brokerage customers interacted with the websites of the following companies: TD Ameritrade (NASDAQ:AMTD), E*Trade (NYSE:ET), Fidelity Investments, Merrill Lynch (NYSE:MER) Direct, optionsXpress (NASDAQ:OXPS), Schwab (NASDAQ:SCHW), Scottrade, ShareBuilder, and SiebertNet. (Note that at the time TD Waterhouse and Ameritrade had separate websites that have now been combined.) If you're interested in the world of brokerages -- either because you're an investor who uses them or because you're considering investing in one or more such firms -- read on.

One thing I learned was that there's less stability in the rankings of brokerages than there is in the rankings of other financial services areas (such as banks). In this latest study (from mid-2006), the top three in overall customer satisfaction were Fidelity, Scottrade, and Schwab. Last year's leader, E*Trade, didn't make the top three. (But it did rank as No. 3 in acquiring new customers.) Lower stability means that up-and-comers have a good shot at advancing. Think of the firms as having slim moats that don't protect their castles too well.

When it comes to website reliability and responsiveness, E*Trade and Ameritrade were ranked No. 1 and No. 2, respectively, on both lists, with Sharebuilder coming in third for reliability and Merrill Lynch third for responsiveness.

The study found some problems that many online brokerages need to address. Prospective customers are apparently clamoring for more clarity regarding fees and commissions, for example. Brokerages acting on this info are in a good position to advance their standing and market share.

A hidden gem?
Another thing I learned was simply about the existence of Keynote Systems -- a small, publicly traded company. I looked it up and learned that "Founded in 1995, Keynote Systems, The Internet Performance Authority, is the worldwide leader in Web performance measurement and management services that improve the quality of e-business." Its 2,300 corporate customers include Verizon, Dell, eBay, American Express, ESPN Mobile, and Microsoft.

I then found it had a market cap around $182 million. It can be very profitable to discover small companies before the herds on Wall Street find them and drive up their prices, so I dug a little deeper. I found:

  • Revenues were growing at an average clip of around 18% over the past few years.

  • Cash and short-term investments have been steadily declining in larger amounts in its last few quarters.

  • Its free cash flow has been growing, nearly doubling in the past few years -- though the last quarter showed a decline.

  • Its debt load is small, and shrinking.

Overall, from these preliminary numbers, the picture doesn't look rosy enough to make me want to continue digging. Instead, I think I'll look for some small winners in our Motley Fool Hidden Gems newsletter. That's where I've found several rather successful investments for myself. I invite you to try it out for free -- our recommendations there are topping the market by a whopping 40% to 18%.

Schwab, Dell, and eBay are Stock Advisor recommendations. Microsoft and Dell are Inside Value picks.

Longtime Fool contributor Selena Maranjian owns shares of eBay and Microsoft and recently had a CAPS ranking of 839 out of 12,301. The Motley Fool has a full disclosure policy.