Press Room: 2006

Fidelity’s Stock Rises, Competition Intensifies for Prospective Customers in Online Brokerage Industry, Reports Keynote

• Keynote Study Reveals Competitive Shifts, Competition for Customers in the Online Brokerage Industry
• One in Seven Prospective Brokerage Customers Dissatisfied with their Online Experience
• Fidelity, Scottrade, Schwab Deliver Best Online Experience
• E*Trade, Ameritrade Provide Best Service Levels for Site Reliability and Responsiveness

SAN MATEO, Calif., — July 19, 2006 — New competitive intelligence studies from Keynote Systems (Nasdaq: KEYN), The Internet Performance Authority®, detail deep shifts in the highly competitive online brokerage industry. With as many as one in seven prospective online brokerage customers expressing dissatisfaction with their online experience – and as many as a quarter (27%) expressing a desire for increased clarity regarding online fees and commissions, the study reveals multiple challenges and tremendous opportunities in the industry.

The Keynote Customer Experience Rankings for Brokerage Web Sites examined the online experience of prospective brokerage customers by measuring 250+ metrics at leading brokerage Web sites as 1,500 consumers interacted with those sites during May 2006. The Keynote Service Level Rankings for Brokerage Web Sites examined the technical performance on brokerage sites including, overall site responsiveness and reliability by running 6,500 simulated interactions with each site during May 2006.

The Ameritrade (Nasdaq: AMTD), E*Trade (NYSE: ET), Fidelity Investments, Merrill Lynch Direct (NYSE: MER), optionsXpress (Nasdaq: OXPS), Schwab (Nasdaq: SCHW), Scottrade, ShareBuilder, SiebertNet and TD Waterhouse (Nasdaq: AMTD) Web sites were evaluated for the studies.

Competition Fierce, Leadership Shifting in Online Brokerage Industry
“The online brokerage industry is clearly among the most competitive on the Web – and the shifts we observe show that leadership and market share are tenuously held in the industry,” said Lance Jones, associate director of Internet research for Keynote.

Highlighting the competitiveness in the market, Keynote noted that in its current study, Fidelity and Scottrade provided prospective customers with the best online experience, beating out E*Trade, which had topped the study last year. Despite being edged in customer experience, E*Trade still ranked as one of the best sites at acquiring brokerage customers online – and atop the service level rankings which measure site reliability and responsiveness. And although prospective customers reported being more satisfied with the products Fidelity offered, they also reported being happier with the online features at Scottrade and Merrill Lynch.

“No one site is winning across the board,” said Jones. “Some sites perform well in terms of product satisfaction, some in terms of providing strong online features, and still others in terms of online customer acquisition. That is likely why we are seeing shifts in the industry. Each of these brokerage companies could learn a lot from their competitors.”

Jones noted that in other online financial services industries Keynote studies, there is more stability in the competitive rankings, and the leaders overall tend to also lead in multiple categories.

Consumer Frustrations: Information on Fees, Trouble Finding Online Demos
Keynote also reported wide ranges in prospective customer satisfaction with online brokerage sites. Although as many as one in five (19%) prospective online brokerage customers express dissatisfaction with the product offering, often because of confusion about fees and commissions, the best sites record 85% satisfaction. On one major brokerage site, more than 27% of prospective customers visiting the site expressed frustration at the clarity of information on fees and commissions. Three well-known sites received excessive complaints from prospective customers regarding their online trading demo, with specific complaints about problems locating the demo. At these sites, close to 3 in 10 visitors (29% to 31%) expressed such frustration.

Keynote Customer Experience and Customer Acquisition Rankings
The Keynote Customer Experience Rankings for Brokerage Web Sites study measured more than 250+ metrics for each site and determined industry leaders in terms of prospective customer satisfaction, brand appeal and customer acquisition success, as well as ranked the sites in more than a dozen different categories including product satisfaction, online features satisfaction and ease of opening an account.

Fidelity, Scottrade and Schwab topped the Keynote Customer Experience Rankings, an overall measure of customer experience across the 250+ metrics measured in the study. Fidelity and Scottrade were joined by E*Trade atop the Keynote Customer Acquisition Rankings, an overall measure of effectiveness in customer acquisition.

Keynote Service Level Rankings for Site Reliability and Responsiveness
The Keynote Service Level Rankings for Brokerage Web Sites examined the technical performance on the public pages of leading brokerage Web sites including overall site responsiveness and reliability by simulating 6,500 interactions with each site over a 30 day period. E*Trade, Ameritrade and Sharebuilder had the industry’s best reliability, indicating those sites were highly available and experienced little or no downtime. E*Trade and Ameritrade were joined by Merrill Lynch as the top sites in terms of site responsiveness, an indication of how fast the sites were in downloading pages and executing transactions.

Overall performance in the brokerage industry is strong as compared to other financial services industries, and has improved in some areas over the past year. For instances, average page download times over broadband connections improved by approximately 6% in the past year.

The industry also saw competitive shifts over the year, with E*Trade dominating the service levels in the industry in 2006, moving up from just an average showing in 2005. There were also large gaps between the best performers and worst performers, with top sites available 100% of the time during peak measurement periods, as compared to poorer sites that were available ess than 96% of the time. Several sites had major reliability issues, with one site unable to take online applications for more than 110 peak hours during the 30 day evaluation period. Another major brokerage company showed daily slowdowns of 45% during peak periods, indicating that the site could not handle the volume of users coming to its site without noticeable slowdowns in page download times.

Keynote’s competitive intelligence studies are available for purchase and provide deep insights regarding the competitive position of each site relative to others in the study from an overall service level perspective (responsiveness and reliability of the site) and customer satisfaction perspective. They also provide deep insights into improving online customer satisfaction generally and specific actionable recommendations relevant to each site studied.

For an abstract about Keynote’s competitive intelligence studies of customer experience and service levels at brokerage Web sites view: www.keynote.com/sbl_forms/July06_Brokerage_Study.html

For more information about Keynote's Competitive Intelligence offerings view: www.keynote.com/solutions/competitive_intelligence_tpl.html

Customer Experience Management
Keynote’s customer experience management (CEM) services offer both competitive intelligence studies and custom engagement services examining best practices and consumer attitudes and behavior on the Web. To learn more about Keynote’s CEM solutions, visit:
www.keynote.com/solutions/customer_experience_management.html

Service Level Management
Keynote's service level management (SLM) solutions provide enterprises with the tools to align IT and e-business goals. To learn more about Keynote’s SLM solutions, visit:
www.keynote.com/solutions/service_level_management.html

About Keynote
Founded in 1995, Keynote Systems (Nasdaq "KEYN") is the worldwide leader in services that improve online business performance and communications technologies. Keynote helps approximately 2,300 corporate customers and 11,000 individual subscribers become "the best of the best" online. The business premise supporting Keynote's mission is: "Online businesses can't manage what they don't measure." As an independent and trusted third-party, Keynote provides IT and marketing executives with unbiased benchmarking data, competitive analysis and operational metrics from the customer perspective. This data measures service levels and customer experience of Web sites, broadband services and mobile communications.

Known as The Internet Performance Authority®, Keynote manages a market-leading infrastructure of 1,600+ measurement computers and mobile devices in over 114 locations and 66+ metropolitan areas worldwide that assess service levels and a panel of over 160,000 consumers who participate in interactive Web site tests that assess user experience. These online user experience tests capture customer attitude and behavior to answer the critical "why" behind the "what." Keynote's geographically distributed measurement services, on-site monitoring appliances, competitive intelligence and custom studies ensure that its customers outpace their competitors in online service levels and overall user experience.

Keynote Systems, Inc. is headquartered in San Mateo, California and can be reached at www.keynote.com or by phone in the U.S. at 650-403-2400.

Keynote, The Internet Performance Authority and Perspective are registered trademarks of Keynote Systems, Inc. Other trademarks are the property of their respective owners. © 2006 Keynote Systems, Inc.

Editorial Contacts:
Dan Berkowitz, Keynote Systems, (650) 403-3305, dan.berkowitz@keynote.com
Dan Cahill, Roaring Communications, (415) 552-3999, dcahill@roaringcommunications.com