eTrade 1999 Annual Report Download - page 3

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The page numbers in this Table of Contents reflect actual page numbers, not EDGAR page tag numbers.
UNLESS OTHERWISE INDICATED, REFERENCES TO "COMPANY" MEAN E*TRADE GROUP, INC. AND ITS
SUBSIDIARIES, AND REFERENCES TO "FISCAL" MEAN THE COMPANY'S YEAR ENDED SEPTEMBER 30 (E.G. "FISCAL
1999" REPRESENTS THE PERIOD OCTOBER 1, 1998 TO SEPTEMBER 30, 1999).
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PART I
ITEM 1. BUSINESS
The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the
consolidated financial statements and notes thereto included elsewhere in this Form 10-K. This document contains forward-looking
statements, including statements regarding the Company's strategy, financial performance and revenue sources which involve risks and
uncertainties. The Company's actual results may differ materially from those anticipated in these forward-looking statements as a result
of certain factors, including, but not limited to, those set forth in the risk factors section and elsewhere in this Form 10-K.
E*TRADE Group, Inc. ("E*TRADE" or the "Company"), through its wholly-owned subsidiary, E*TRADE Securities, Inc., is a
leading provider of online investing services and has established a popular, branded destination Web site for self-directed investors.
The Company offers automated order placement and execution, along with a suite of products and services that can be personalized,
including portfolio tracking, Java-based charting and quote applications, real-time market commentary and analysis, news and other
information services. The Company provides these services 24 hours a day, seven days a week by means of the Internet, touch-tone
telephone (including interactive voice recognition), online service providers (America Online, CompuServe, and Microsoft Network),
and direct modem access. E*TRADE's proprietary transaction-enabling technology supports highly automated, easy- to-use and
cost-effective services that empower its customers to take greater control of their investment decisions and financial transactions. The
Company believes that its technology can be adapted to provide transaction-enabling services related to other aspects of electronic
commerce.
Free resources available to the public on E*TRADE's Web site include breaking financial news, real-time stock and option price
quotes, company financial information and news announcements, live market commentary, personalized investment portfolios,
investor community areas, and search and filtering tools for mutual fund and fixed income products. E*TRADE's Web site services
three levels of investors--visitors, members, and customers, with each successive group gaining access to additional value-added
products and services. Visitors can view market information, headline news, stock quotes and charts, mutual fund information, and
much more. By registering, but not opening an account, a visitor becomes a member and receives free access to many advanced,
customizable investment research tools, including free real- time quotes and secure email. Customers, those investors with E*TRADE
accounts, have complete access to E*TRADE's trading engine and to all the investment research and management features, including
Smart Alerts, and many sophisticated analytical and record keeping tools. Customers may also subscribe to E*TRADE's Professional
Edge service and apply for IPOs, as well as receive access to institutional quality research reports, and other premium services.
As of September 30, 1999, the Company had 1,551,000 active accounts, up 185% for the year, with assets held in customer accounts
in excess of $28.4 billion, up 154% from last year. Average daily deposits were $51.4 million per day in fiscal 1999, with an average
of $58.1 million in the quarter ended September 30, 1999. In fiscal 1999, E*TRADE added 1,007,000 net new active accounts, an
increase of more than 3 times last year. The Company's average daily transaction volume was 80,350 for the quarter ended September
30, 1999, a 163% increase over the average daily transaction volume of 30,494 in the equivalent period in fiscal 1998. The Company
began offering online investing services through the Internet in February 1996, and it has been the Company's most rapidly growing
channel, with transactions over the Internet and through online service providers representing more than 90% of the Company's fourth
quarter 1999 transaction volume.
The extremely strong gains in new accounts, transactions and assets represent the success of the Company's strategy to become the
branded, global leader and recognized authority in electronic personal financial services. This strategy involves: leveraging the
powerful brand of E*TRADE to increase new customer accounts, and assets held in customer accounts, by offering a unique and
compelling online experience; providing the broadest range of high value-added tools, products and services; enabling "anytime,
anywhere, anyway" access, worldwide, to actionable information; and integrating a broad-based digital financial media strategy with
existing
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product and service offerings. Specific examples of the Company's execution against this strategy included the introduction in August
2002. EDGAR Online, Inc.