Real-Time Tracking Is Latest Salvo In Market Share War

By CARRIE LEE

THE WALL STREET JOURNAL INTERACTIVE EDITION

Friday, January 28th, 2000 5:00 PM Eastern Time

Two financial Web sites are upping the stakes in the battle to win market share by providing free real-time portfolio-tracking tools.

Deep-discount broker Datek Online and financial-information provider money.net now let users access a list of "streaming" quotes that fluctuate in real-time as prices change. Free real-time stock quotes have replaced 15- to 20-minute delayed pricing as the standard among online brokers and financial Web sites, now that the fees charged by the exchanges have come down. While a few brokers have offered real-time portfolio tracking to clients for months, the high costs involved have kept most financial sites from offering such a service gratis.

But the fees that exchanges charge for accessing price quotes have declined dramatically over the past year. In March, the Nasdaq Stock Market reduced the per-quote and monthly fees it charges to disseminate real-time quotes to nonprofessionals. The New York Stock Exchange and the American Stock Exchange followed suit, respectively, in October and November.

Free real-time portfolio tracking breaks new ground for consumers. "We are the only [nonbroker site] that, without any strings attached, gives you a real-time streaming portfolio manager," said Harold Van Arnem, chief executive officer of New York-based money.net. The site currently allows visitors to track a list of up to 30 stocks simultaneously, and will expand the listing to 50 stocks on Tuesday. The prices "stream," or fluctuate in real time as stock prices change, as do profit or losses as calculated from the purchase price.

Datek Online, owned by Datek Online Brokerage Services in Iselin, N.J., also offers free real-time streaming quotes to customers and visitors to its site. Users can track up to 40 stocks simultaneously, but the drawback is you have to re-type in the ticker symbols every time you log in to its site.

A new version of Datek's service is due out in a few weeks that will allow customers to save their lists in between log ins. Clients will be able to save up to nine lists with as many as 20 stocks in each. Visitors will be able to save up to nine lists of 10 stocks each.

One reason financial sites and online brokers had been reluctant to provide real-time portfolio tracking tools was the theory that the service would only be of use to active traders, who need to keep an eye on small price changes. Indeed, Fidelity Investments spokesman Jim Griffin said that most of the customers that use the broker's real-time tracking feature fall into the broker's active-trader category.

But others are convinced that the feature has mass appeal. Dan Burke, a senior analyst at Gomez Advisors, a Lincoln, Mass., research firm that tracks the online business, says real-time portfolio tracking is the next stage in the online-investor revolution. "The issue here is simply real-time everything, as the industry matures you really have to have real-time information to appease the online investor," he said.

Mr. Burke says more brokers are likely to start offering real-time portfolio tracking as a result. Indeed, some have acknowledged that they have looked into the idea. "It will be a natural evolution," he said.

Since brokers already have a relationship with their clients -- although a few, such as Datek and E*Trade Group offer some services to nonclients -- Mr. Burke says real-time portfolio data poses a challenge to financial sites such as Yahoo! Finance, which has built a strong user base in part because of its free, 15- to 20-minute delayed portfolio tracking service.

A spokeswoman for Yahoo! declined to comment.

Other sites plan on rolling in their own free real-time portfolio-tracking tools. By March, National Discount Brokers will make real-time streaming portfolio and so-called watch-list tracking available for its customers on its site. The broker currently offers real-time portfolio tracking, but investors must manually refresh their screens to get the latest prices. Watch lists are available with 20 minute delayed pricing.

Fidelity added the real-time portfolio tracking feature to its PowerstreetPro proprietary software last fall. The application allows clients who make 36 or more trades a year, or have at least $500,000 in their accounts, to access stock portfolios or watch lists that are updated in real-time at five-minute intervals. Clients must click an update button to get the latest prices.

At least one other nonbroker Web site is gearing up to offer real-time portfolio tracking. Globalnetfinancial.com, an international provider of online financial products based in Boca Raton, Fla., plans to offer free real-time streaming portfolios on its subsidiary site, America-invest.com.

Richard Hefter, editor in chief of Globalnetfinancial.com, says the feature should be available by the beginning of April. "It's what users are increasingly demanding and expecting," he said. "Time is hugely important to investors, we want to give them the fastest tools available."

Unlike brokers, which make money from trades and other customers account services, financial sites like money.net and Globalnetfinancial.com must earn revenues in other ways.

Mr. Van Arnem of money.net says he is committed to keeping the site's real-time portfolio feature available at no cost, even as the company absorbs the costs to provide the service. So far the site, which launched in early October, has more than 50,000 registrants. The feature will be a loss leader as other services, such as online trading, banking and mortgage lending, are added through partnerships, he said. Money.net's business model is based on advertising and revenue sharing agreements with partners.

"We want to get to a larger scale as far as user base, we have the first mover advantage and we intend to capitalize on it," said Mr. Van Arnem. "In six months companies will do what they can to keep up with our product."

Money.net has signed partnership agreements with 60 Web sites that will offer its portfolio services on their investing areas. Partner sites include the National Review Online, the Web site for the conservative magazine, and Company Sleuth, a Web site owned by Infonautics Corp. based in Wayne, Pa.