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Staryoo.com should be considered as a Business-to-Business-to-Consumer (B2B2C) Internet model due to our servicing both brokerages and their clients (our membership). We will be a technology facilitator by providing the conduit through which clients will communicate with their brokerages and vice versa. For members (brokerage clients), Staryoo.com will provide a user configurable three-dimensional Web interface for trading Chinese equities and securities. This platform will facilitate equities trading by providing a seamless interface between the individual investor and his or her brokerage firm. Brokerage firms will realize the cost effective advantages of Staryoo.com providing real-time market updates, news, technology, etc. to a much greater clientele than that particular brokerages’. Additionally, with Staryoo.com maintaining a Virtual Private Network (VPN) for each brokerage, it provides a completely encrypted communication between the brokerages and their clients, allowing for safe and secure order transactions and account updates.
3.1 Service Description
We will incorporate a number of features into the platform to improve the overall sophistication of traders:
- Internet Stock Trading: Staryoo.com will cooperate with the China Security Regulatory Commission and member brokerage firms to provide a comprehensive trading platform for individual brokerage branches, including online order execution, confirmation, and account access.
- Real-time Updates: Market information will be updated in real time, giving the latest prices for all global major indexes. Real-time stock quotes will be available in a scrolling, ticker format with user-defined alerts and customizable configurations.
- News Updates: Direct links will be provided for instant access to recent news developments from around the globe. Video-on-demand (VOD) technology will be employed to allow traders to get up-to-the-minute broadcasts of market analysis from brokerages.
- Bank Transfers: Staryoo.com will provide real-time money transfers between a user’s bank accounts and their brokerage firms.
- Fundamental and Technical Analysis: Members will have access to real-time stock market news and information. Advanced charting techniques will allow for a broad range of technical analysis capabilities.
- Market Recommendations: Economists and market analysts will provide their recommendations and economic outlook.
- Pager Transmission Services: Staryoo.com will provide trading alerts to individual investors utilizing the latest technology for both 1-way and 2-way pagers along with Personal Digital Assistants (PDA’s).
- Chat Rooms and Forums: Staryoo.com will provide a “community” for investor communications, facilitating the exchange of investment ideas and recommendations. This center will also provide online music and games for entertainment and relaxation.
- Staryoo Investors Club: A premium, value oriented membership that provides discounts on retail items, commissions, and free trading tips and recommendations.
- Staryoo University.Com: This educational center will provide new investors with the knowledge and tools required for Internet investing. Most new investors are frightened by investing their hard-earned money over a medium that they understand little about. Allowing investors to practice online trading in a pseudo-trading environment (i.e. no cash or “paper trading”), will build confidence in their trading strategies and improve their overall online experience. Graduates of Staryoo University.com will receive a Bachelor of Staryoo in Investment Technology (B.S.I.T.) degree and a certificate will be emailed to each graduate. Graduates will receive free membership into the Staryoo Investors Club that provides discounts on retail items, commissions and free trading tips and recommendations.
- E-Business/eStaryoo.com: Staryoo.com will utilize its huge membership base to sell goods and products (including books, tapes, investment classes, etc.) in a retail environment. Other investment vehicles such as stamps, coins, and antiques may be included.
- Planning: Staryoo.com will provide various types of individual investment planning ranging from cash flow management to retirement planning.
- Customer Service: Staryoo.com’s customer service staff will be available to handle all customer questions regarding site functionality and its proper usage.
3.2 Service Description – Brokerages
Brokerages will realize the following advantages and services:
- Secure Virtual Private Network (VPN) communications between brokerages and their clientele. Using the SOCKv5 protocol (the standard for Authenticated Firewall Traversal), will allow implementation at the brokerage site with little additional hardware overhead. SOCKv5 is the standard for secure extranet communications.
- Brokerage branded Web page. Staryoo.com will maintain a home page for each VPN brokerage, allowing its’ clientele trade.
- Dynamic brokerage market updates and commentaries. Brokerages will have the ability to update their VPN home pages with brokerage-specific market updates. This will allow them to target their clients with brokerage-specific updates.
- Lower Information Costs. Staryoo.com will provide all news, market updates, quotes, etc. to clients. This will provide significant cost savings to brokerages that would normally purchase these information packages.
- Pre-packaged CSRC Online Trading application. Staryoo.com will provide brokerages with an application for the CSRC. There are 16 items which must be provided to the CSRC for every brokerage that wants to implement online trading, much of which requires detailed analysis of system implementation and procedures. Staryoo.com will be able to minimize the time-to-market for brokerages wishing to implement online trading.
- Trading Frequency. Due to the “community” structure of the main Staryoo.com site, investors will exchange ideas and investment strategies and ultimately increase their trading frequency. Increased trading frequency translates into increased commissions for brokerages.
- Scalable client base. As Internet access expands in China, membership will increase and a greater portion of the population will find investing more convenient and neccessary. Brokerages will benefit from this trend as their client base and revenues from transactions increase.
- Collateral material. Staryoo.com will provide all collateral material (brochures, pamphlets, etc.) to brokerages for distribution to their clients. Staryoo.com recognizes the importance of educating members as to the functionality and usage of its financial platform.
- Quality News and Quotes. Members will receive real-time quotes from each exchange (Shanghai and Shenzhen), and financial news from Reuters.
- Web page design and maintenance. Initially, Staryoo.com will provide standard Web design and functionality to brokerage VPN home pages, but as Internet usage for online trading develops, brokerages will require additional functionality and customization of their VPN sites. Staryoo.com will provide these services to brokerages and allow them to focus on their core business.
- Advertisement brokering. To offset a portion of the expense associated with providing the technology infrastructure to the brokerages, we will provide the purchasing and re-selling of brokerage Web page space for advertising. Since a majority of brokerage Web page space is white (blank) and is generally used for just text, this provides an opportunity to sell space to advertisers who want to target a specific demographic. By selling this space on behalf of the brokerages, the income can partially offset the fees paid to Staryoo.com. Staryoo.com will charge a premium to the end-advertiser (i.e. brokerages may get a credit of $10 per cost per thousand (CPM) while we sell the space to advertisers for $15 per CPM).
- Wireless Transmission Protocol (WAP). Future services will allow brokerages to communicate market updates and news directly to their clients. This will drive members to Staryoo.com and ultimately to the brokerages.
3.3 Competitive Comparison
There are several Internet trading websites in China, but their functionality is less than that planned for Staryoo.com, and they offer little in the way of user functions such as technical/fundamental analysis, education, planning, pager alerts, forums, etc. There are several well-known content providers in China that have a large customer base and may present potential competition to Staryoo.com, but they do not have the investor base nor the expertise with brokerage firms, cryptography, and equities trading systems.
The key to fulfilling the individual investor’s online requirements will be for Staryoo.com to keep an active dialog with our members. We must listen to their wants and needs and modify, add, and develop new resources as required. Staryoo.com’s plans are to solicit product reviews and suggestions from members by giving discounted commissions, products, and/or services. These “Product Service Reviews” will be used as feedback for future technology and marketing developments and will ensure that our members are satisfied with their entire online trading and investing experience. Promotional giveaways (computers, reduced commissions, etc.) will be provided to encourage membership interaction. It is only after the customers are satisfied that Staryoo.com will enjoy a consistent and expanding investor membership.
China’s Internet access is expected to increase over 400% between June of 1999 and the end of 2000. Coupled with China’s membership into the World Trade Organization, Staryoo.com anticipates that Internet-based trading will quickly become accessible to many traders. Given the relatively few competing Internet trading sites available and their limited functionality, the Staryoo.com platform should quickly become the industry standard.
Multimedia streaming, compression, and multicasts are the hot technologies for the Internet. Investors constantly want more quantitative and reliable information to make their investment choices. Traditional mediums like newspaper, radio, and television cannot keep up with the information flow and make the search for such news items difficult, cumbersome and time consuming. Staryoo.com will benefit from the progression of new Internet technologies by providing its members with increased information exchange.
Staryoo.com’s technical team has previously developed (1998) a dedicated remote online (non-Web-based) trading platform for China JiangQian Tide.
Staryoo.com has extensive experience in data encryption and network communication security systems used by the Industrial and Commercial Bank (ICBC) as well as by 600 China brokerage firms and their branch offices. Their payment cryptography system has obtained certification from the National Cryptography Administration Committee and meets ISO9002 quality requirements.
Staryoo.com has experience in the development of 3-dimensional animated interfaces for dedicated line trading products.
3.6 Future Services
Staryoo.com must remain on top of the new technologies developed for the Internet. In the future we plan on expanding upon the concept of a User Configurable Trading Platform (UCTP) by providing investors a method of customizing their Web platform to meet their individual needs. There are many types of investors from very active to one-stop shoppers. Each of these types of investors will require their site to do different functions (i.e. active traders will want sophisticated technical analysis, while one-stop shoppers will be more fundamentally driven). Additionally, chat rooms and forums should be trader-specific, so that trading confusion is kept to a minimum and trading priorities are maximized. It is the vision of Staryoo.com to develop the technology that will provide a customizable platform usable by all types of investors.
Wireless transmission via WAP of Staryoo.com emails, news, market updates, and stock quotes to both WAP and non-WAP enabled phones will be implemented within the first six months. It is recognized that the use of cellular phones is gaining in popularity in China as their costs are relatively cheap when compared to stand-alone computers. We have discussed deploying a wireless portal in China with TeleWAP.com located in Mountain View, CA. TeleWAP, Inc. has recently negotiated with SINA.com to deliver SINA’s Chinese Internet content to users in both the U.S.A. and Asia.
With the financial markets expanding, Staryoo.com will continue to offer additional trading vehicles. Some of the products we plan to offer are: options on stocks, mutual funds, bonds, commodities and indexes, options on commodities and indexes and annuities.
With the advent of WTO membership, it is expected that Chinese investors will expand their trading horizons to include day trading, a very popular form of “self-employment” currently enjoyed in the United States. Day trading in China was curtailed in 1994, and a one-day settlement period was implemented. With WTO membership, if investors cannot find day trading in China, they will look elsewhere–particularly at the U.S. markets.