Here's an interesting story. Looks like nasdaq's plan is just to buy out all the remaining ecns. --- NET STOCKS What's the price for ECN Archipelago? Plus: The Over's are under, Overture, Overstock sink By Bambi Francisco, CBS.MarketWatch.com Last Update: 4:02 PM ET Feb. 25, 2003 SAN FRANCISCO (CBS.MW) -- If Nasdaq buys Archipelago, it might have to pay about $400 million. That's what the electronic trading network generates in annual sales, said Archipelago CEO and founder Jerry Putnam, in an interview with CBS.MarketWatch.com. Archipelago -- or "Arca" for short -- is privately held, and has never publicly disclosed its sales. But by Putnam's analysis of market values, companies like his are worth about one times revenue. The easy math suggests that Archipelago, which raised $190 million since its inception in 1996 and spent about $50 million to build a global electronic network that's stolen trading volume away from Nasdaq, might just be picked up for the $400 million price tag. After a wave of consolidation in the industry last year, consolidation talk is heating up again. It's almost to be expected. There were nine ECNs in 1999, Putnam recalls, but the ranks have been thinned out as there were several mergers last year. This time, the talk is about a possible marriage of Nasdaq and Archipelago. Putnam didn't deny that there have been conversations, but elaborated only by saying: "There are three of us left. There is room for two. Somebody's going to want to do something." One of the three is Instinet Group (INET: news, chart, profile), which began well before Archipelago started hosting trades in 1997 and which merged with Island last year. Archipelago quickly emerged to be a rising star and recently boasted 400 million shares per day. On Monday, Archipelago handled a record 4 percent of the New York Stock Exchange trading, said Putnam. (After this column first appeared Tuesday morning, the NYSE weighed in with its record of trading volumes. According to the NYSE, Arca executed .6 percent of the 1.2 billion shares traded.) Combined, the Instinet and Island trading volume surpasses the volume traded on the Archipelago system. Reuters (RTRSY: news, chart, profile), which owns 63 percent of Instinet, just posted its largest loss in history. There has been speculation that Reuters might consider a sale of its stake in Instinet. If Reuters sells its stake, the whole company could essentially be put up for sale. And what's more, Instinet might be a willing seller. Consensus estimates for the company's 2003 results fell from earnings projected at 17 cents per share to a loss of 3 cents, due to higher expected expenses in the coming year, according to Richard Repetto, an analyst at Putnam Lovell NBF.