The investment bank Friedman, Billings, Ramsey Group threw its hat in the on-line ring last week.

The Arlington, Va.-based investment bank launched an Internet company, FBR.Com, that will sell stocks it underwrites directly to the public.

Friedman Billings will sell up to 20% of all initial public offerings to retail investors through FBR.Com, which it is billing as an on-line investment bank.

FBR.Com is the firm's first foray into retail distribution, said Suzanne Richardson, a Friedman Billings managing director.

The firm has distributed IPO stocks to institutional investors only.

Retail investors would have to buy at least 100 shares of an IPO, Ms. Richardson said. They would also have access to hedge funds and venture capital investments.

"The Internet is changing our business overall," Ms. Richardson said. "If we didn't do it, we would be asleep at the switch."

With billions being invested on-line, industry leaders such as Charles Schwab & Co. have sought to differentiate themselves by offering slicker services, including access to IPOs. Schwab has done some equity underwriting since 1997.

In turn, firms that underwrite securities, such as Goldman, Sachs & Co. and Merrill Lynch & Co., are taking steps toward on-line capabilities. Goldman recently announced plans to take a 22% stake in Wit Capital Group, an on-line firm. Merrill plans to use its proposed acquisition of the technology arm of D.E. Shaw & Co., an investment banking boutique, to explore the medium.

"There's a realization that the individual investor is an ideal target for IPO shares," said Michael Gazala, a senior analyst with Forrester Research Group of Cambridge, Mass.

Companies going public want to reach as many investors as possible in an instant, Mr. Gazala said. "The human broker is very inefficient" compared with the Internet, he said.

Ms. Richardson said Friedman Billings can differentiate itself from the on-line brokerage herd because it has an established presence as an investment bank with underwriting capabilities. It was established in 1989.

"We have a whole universe of investment bankers bringing in product," Ms. Richardson said.

But Mr. Gazala noted that Friedman Billings lacks brand recognition on the Internet.

"'FBR' means nothing to the average investor," he said.

One way to woo investors would be to go through an existing on-line brokerage, Mr. Gazala said.

Ms. Richardson did not rule out the possibility of alliances when Friedman Billings starts to offer equity trading on-line.

She said the firm will use the Internet as a marketing tool while exploring other advertising methods. Those methods have yet to be determined, she said.

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