EXCERPT:

Fidelity Investments.....last year began offering Web-based 401(k) administration for small companies. It's been an instant hit. The program added 750 companies last year. Historically it's been hard for small companies to have 401(k) benefits because administrators charged too much or, in Fidelity's case, didn't offer them at all because they were too expensive to operate. What's in it for Fidelity? Well, the program was expensive to set up, isn't profitable, and doesn't generate big fees. But e-401(k) isn't being measured by how much money it makes. It's about taking a small risk on a technology that might prove to be essential--both to getting into a new market and to discovering new tools for existing customers. "I had this same discussion in the early 1990s, when we went after the middle market," says Steve Elterich, president of Fidelity eBusiness. "At that point no one was offering 401(k) services to them. That's now our most profitable market segment." Why? A lot of those companies--like Microsoft--have grown into very, very big companies.