GE Catches Online Fever
Business Week (08/14/00) No. 3695 p.122; Moore, Pamela L.; Smith, Geoffrey

General Electric Chairman John F. Welch's rule that GE businesses must remain leaders of their respective industries to stay in operation may be tested by its new GE Financial Network site. The site, located at www.gefn.com, is supported by a multi-million dollar investment and its services will be featured in advertisements airing in September. The site will be marketed during the Summer Olympics and on through 2001. According to Michael D. Frazier, who runs GE Capital's consumer division, gefn.com wants to be known for offering customers a range of reliable financial services. GE is late to the industry, however, and its site does not have the number of options that rivals like WingspanBank.com do. GE executives insist that the site has advantages, including having GE Capital as a distribution channel. GE Capital's 1999 revenues were many times the size of those earned by the leading Internet brokers, and GE Financial Assurance (GEFA) continues to increase its annual income significantly. Frazier has already led GEFA through a period of rapid growth including 15 acquisitions, a more than 100 percent increase in assets, and the tripling of revenues. The new site plans to draw upon GEFA's 25 million customers for business by linking gefn.com to forms used by companies that work with GE. The site currently offers Houston CompuBank- and Paytrust-sponsored services related to billing and banking as well as insurance and mutual funds. The heads of gefn.com intend to extend the company from within. Some analysts are skeptical of the service's ability to compete with big competitors. One concern is that gefn.com has no actual bases for people to visit, but depends entirely on telephone and Internet services. It is planning for one center in Atlanta. People still prefer person-to-person contact when they bank. The site will soon be launched in 17 more countries, with a focus on Japan. Frazier says gefn.com does not actually have to dominate the big banks but simply thrive according to its own plans.


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