As part of the agreement, E*Trade will market and distribute Cahoots' instant messaging program on its site and will become the first high-profile user of the Brisbane, Calif.-based company's new business product.
"The fact that E*Trade selected Cahoots gives us a very strong level of credibility," said John Rizzo, Cahoots chief executive. "It helps validate our technology and our brand orientation."
Cahoots is one several companies whose programs allow Web site visitors to recognize and chat with each other. Other companies in the market include CrowdBurst, Odigo, NetDive and SideTalk.
Earlier this month, Siga Technologies signed a letter of intent to acquire Hypernix, one of the pioneers of so-called co-browsing technology with its Gooey chat program. CNET Networks, publisher of News.com, last year invested in Hypernix.
In addition to enabling chat messages, Cahoots allows people to have voice conversations over the Net and to place virtual post-it notes on Web sites. The company's business-oriented Cahoots for Sites, which it will also unveil tomorrow, allows site operators to monitor the chat conversations on their Web sites and to block Cahoots members from posting messages.
E*Trade will initially use Cahoots for Sites in its community area and will eventually use it for customer service, Rizzo said. Other companies that will use the technology include Ferrari North America and Study24-7.com.
E*Trade and Cahoots declined to say how much the online brokerage invested in Cahoots or the percentage stake it took in the company.