Another Player Jumps Into Hot Online Investing Game.

MAYBE New York City has Wall Street, but Los Angeles -- or at least Santa Monica -- seems to be stepping up to the plate when it comes to owning the title of "Virtual Wall Street."

Yet another Santa Monica-based firm, GlobalNetFinancial.com, is making strides in the online investment banking, trading and stock syndication game. It's joining outfits like dsm.com, the Santa Monica-based online outlet for private equity deals, and Trading Edge Inc., the online marketplace for institutional trading of junk bonds, in the push to do more deals on the Web.

GlobalNetFinancial's history is perhaps more colorful than most dot-coms. The company founder is Stanley Hollander, who also serves as chairman and chief executive. In previous incarnations, Hollander was head of the local investment banking team for New York-based securities house Gruntal & Associates.

Sensing opportunity, he split off from Gruntal a few years back and started Santa Monica-based International Capital Growth Inc., a publicly traded investment banking boutique that specialized in small-cap offerings.

"But you know what happened to small caps," said GlobalNetFinancial spokesman Robert Prag. "They have not done anything (appreciated much) for years. Hollander was about to shut things down."

But in 1997, he had a brainstorm. First, he decided to rename International Capital Growth -- at that point almost a shell company -- and concentrate on becoming a leading online source of news and financial services in Europe, which was lagging well behind the U.S. in Web services.

Pursuant to that, Hollander formed alliances with U.K.-based Freeserve plc (freeserve.com) and World Online, which are two of leading European Internet service providers, each akin to America Online in the United States.

As part of the arrangement, GlobalNetFinancial provides financial and business news content to Freeserve and World Online often on an exclusive basis. In exchange, GlobalNetFinancial earns the right to offer European Web surfers highly visible links to financial services such as the trading of stocks or buying of insurance.

For example, freeserve.com's portal features prominent links to Web sites hosted by GlobalNetFinancial.

To make money, GlobalNetFinancial takes a fee for all financial business conducted through those affiliated online services, and also has been taking equity stakes in the online purveyors of services that operate within its Web space.

"That's what's different about our revenue model," said Prag. "We don't rely on banner advertising, which hasn't shown itself to be a profitable model. We make money every time someone buy or sells stock, or buys insurance, through our Web site."

As if to offer proof of the pudding, GlobalNetFinancial announced last week that it is upping its equity stake in Eo.net, from 8 percent to 29.9 percent. Eo.net is an online seller of initial public offerings in Europe that's featured on GlobalNetFinancial's Web site. GlobalNetFinancial traded 800,000 of its shares (market value $12.25 million) to Eo.net in exchange for the increased stake.

GlobalNetFinancial also announced the launch earlier this month of stockacademy.com, an online securities brokerage serving the European market.

So far, GlobalNetFinancial is not making money. But where a few years ago it was a nearly worthless shell company, now it touts a market cap north of $300 million.

Prag expects to see profits within a couple of years, and for GlobalNetFinancial to make some inroads into the U.S. online market as well.

Christopher Jennings, managing director in Santa Monica with Minneapolis-based securities brokerage Friedman, Billings, Ramsey & Co., also sits on the GlobalNetFinancial board.