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Online Brokers' New Plan

Cramer overhears an Internet discounter's plans for a new ad campaign in the wake of Merrill Lynch's move online.

Let's step into a brainstorming session between the execs of the legendary Internet discounter TradesRUs and its incredibly slick ad people from the West Coast. This mythic session took place yesterday after the news of Merrill Lynch's (MER) radical plan to embrace the Net. I can't believe they let me into this stormy meeting, but what the heck, as the ad campaign says, I am a fly on the wall.

Joe Churner (from TradesRUs):

Looks like our Trojan Horse in Merrill has been discovered and outed. Launny's now working for them. They are embracing the Net. As long as we had our Launny trashing the Net and its users, we were picking up 10,000 new customers a week from them. But good things can't last forever.

Jim Baitnswitch (head ad man):

Hey, so what! We have a ton of brand loyalty.


Well, not really. You see, we have a lot of outages, a lot of pissed off customers and our growth depended on our ability to cherry-pick Merrill-type customers who were tired of paying $200 a trade. Now what are we going to do? Who the heck are we going to pick on?

Our whole advertising campaign is about making fun of stupid, slovenly, overpaid brokers who just sit around picking their noses between obnoxious calls to people at home during family dinner. Our new 60-seconders, on


this week, picture dinosaur-like brokers, with bad breath and big cigars, churning nursing-home patients with $500 commissions on penny stocks. I don't know.

(WORRIED) I think this Merrill thing blunts that initiative. Now what do we do? Can we bring out that ad which has suspender-wearing brokers smashing computers as a way to get back at us? How about that campaign that has brokers trying to sabotage the Internet with viruses while they simultaneously jam their clients with one-time specials on


stocks with half-point commissions?


Nope, that won't fly. People like the Net. We don't want to show how easy it is to shut the Net down. We need a new villain.

(THINKING) Hey, I read in the


TheStreet Recommends

yesterday that there was

some gal, at some


place, who has been stinking up her mutual fund with a lot of losers. So then I was looking at how the mutual funds have been doing, and, oh my, that Pilgrim woman, she's not the only dunce.

Heck, the industry is filled with underperforming bozos who charge a high percentage and fall well behind the


. Morons! I think we go after mutual funds, saying "You can do it better yourself." Maybe we get some monkeys on PCs buying stocks and outperforming mutual funds, saying "You can, too."


I don't know about that monkey thing. Might insult our "clients." But I love the idea of attacking the mutual funds. We don't have any of them. Merrill does, so Merrill can't mimic this. Let's go after those bozos. This is brilliant. They have trillions under management and can't beat the market. They are total losers. Anybody can do better than they can. I love it. New bad guys!


OK, we can do that. We can shoot a 60-seconder of a client opening up his mutual fund statement at the end of the first six months of this year and fainting while repo men take his furniture and car. Then we show him doing homework on the Net, doing a few good trades with TradesRUs and then, in the final scene, we show him on a yacht.


Hoo-hah! That's a wrap. Start snapping! We need it by the end of the second quarter. Brilliant! But, hey, do we have to worry about this market rolling over?


There's always a bull market somewhere!

And that's how new campaigns-- and new villains-- are made.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at