Recently, I was at a Web 2.0 conference. I asked many companies a simple question: "So how do you charge for your service?"

In most cases, the answer was: "It's free."

Well, as I dug in some more, I realized the business model for these companies is usually an advertising play.

And that's the case with a New Age brokerage firm, Zecco. If you want to trade stocks on the site, you will pay no commissions (the company's name is a mesh of "zero commission online"). Instead, you must deal with Google ads.

That sounds like a pretty good deal. Hey, how many of you actually look at ads?

So, how good a deal is this for Zecco?

It's a tough call. In the brokerage business, the cost of acquiring a customer - and keeping a customer - is not cheap. But, if a firm offers free trading, this can be a great way to get lots of customers.

Although, there are likely other revenue models, such as making money from cash balances, margin loans and so on. This is a big reason that brokerage firms have been charging rock-bottom rates over the years.

Continue reading Zecco: trade stocks for free

Zecco: trade stocks for free originally appeared on BloggingStocks on Thu, 05 Oct 2006 12:33:00 EST. Please see our terms for use of feeds.