• by Gavin O'Malley  @mp_gavin, January 15, 2010

Financial services company E-Trade has acquired Cake Financial, the investor community and stock recommendation service said Friday. Financial terms of the deal were not disclosed.

Rather than build on Cake Financial's existing community, however, E-Trade has shut down the service, effective immediately, and instead will incorporate Cake's technology and staff into its existing operations.

"Cake Financial is now a proud part of E*Trade Financial Corporation and aspects of the Cake service will be incorporated into the E*Trade website," Cake Financial founder and CEO Stan Carpenter said in a letter to members. "The Cake Financial website will cease operation as an independent service."

Carpenter assured members that in the course of the transition, the financial information in their "Cake account" and the private data they shared on the community is safe. "Your information is encrypted and will be deleted and destroyed," promised Carpenter. "For those of you that paid for either Cake Premium or Cake Comparison, you will be reimbursed fully."

Representing some degree of industry consolidation, the deal follows Intuit's acquisition of social financial services startup Mint for $170 million in September. Launched in September 2007, Mint grew quickly to track nearly $200 billion in transactions and $50 billion in assets.

Founded in early 2006, the San Francisco-based startup allows users to import their portfolio data from multiple brokerages and share their trades with other users. Members can then follow the investments of other users on the site.

The site's key selling point was the quality of its top one percent of users, known as the "elite," which reportedly had consistently outperformed various market indices.

Just over a year ago, Cake secured an additional $1.5 million to its first venture round of $1.26 million.

Cake's rivals included social stock-picking sites like Covestor, Social Picks, and StockTwits.