Mutual fund companies are not only grappling with how much to invest in developing their websites but also how much to spend on online advertising and marketing to drive traffic to their sites.

Mutual fund companies are allocating a very small percentage of their advertising budgets to online advertising, say technology consultants. Paid Internet advertising comes in several forms. There are, of course, the rectangular banners that flash at the top of search engines like Yahoo! and websites like Bloomberg and Morningstar.Net. But there are also the less overt marketing partnerships that fund companies and brokerages strike with Internet service providers like America Online or with websites aimed at particular demographic groups, that have personal finance sections.

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