The high price of free
Talk about a case of bad timing. Just two days after Zecco.com launched its trading platform for commission-free stock trades, Bank of America
Bank of America's deal is a bit different. It will be for accountholders who have at least $25,000 in the bank. The bank is also rolling the program out slowly -- it'll start up in the Northeast and expand over the months that follow.
However, Bank of America did what Zecco couldn't, in that it had an immediate impact on the shares of leading discount brokers, such as CharlesSchwab
This is definitely a gutsy move for Bank of America, because it will be taking a $2 to $3 hit on every trade. Just as Zecco is hoping to make up the difference in margin balances and online advertising, Bank of America is aiming to recoup its costs through increased account balances and by moving more of its higher-margin services, such as loan originations and CDs.
Can one move alter the face of banking? Can one move destroy the buoyant deep-discount-brokerage industry? We may be getting ahead of ourselves on that front. However, what is likely is that more people will get in on the market, now that the public increasingly perceives it as a club with no cover charge. That will leave it up to sites like ours to help educate the mainstream audiences on the Wall Street nuances. No problem there. We've been doing just that for a dozen years now. We may also see investors moving out of mutual funds and into ETFs -- exchange-traded funds -- as a way to buy into a basket of stocks with the ability to move in and out throughout the trading day.
Either way, free trading sounds like a great deal for the consumer, as long as that consumer knows what he or she is getting into.
Lonelygirl15 is lonely no more
It's amazing what a $1.65 billion stock deal and complete autonomy will do to a company. Now that YouTube has become Google's
I went through some of the comments from users on the video on which co-founders Chad Hurley and Steve Chen revealed the deal. A lot of the comments complained that the duo is really out of touch. The most popular gripe was that YouTube had sold out and that the site would now be folded into a Google Video site, where viewers would have to pay to watch videos.
Forget for a moment that many of these young posters have no idea what autonomy means. Why would anyone expect Google to tweak something that isn't broken? If Google thought it could achieve the same thing through Google Video, it would have saved itself the printing of $1.65 billion worth of stock. And Google Video is perfectly free, save for the commercialized content that it's selling.
Google may incorporate more text ads into the site. A riskier move may be to place video ads before, or preferably after, selected clips. It can't do much more than that, because the moment tollbooths go up is the moment the community will flee to the next unobstructed YouTube clone.
So have a little faith, YouTubers. At the very least, look up the definition of "autonomy."
Until next week, I remain,
Longtime Fool contributor Rick Munarriz recommends windshield wiper fluid when trying to look back. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does own not own shares in any of the companies in this story. The Fool has a disclosure policy.