Social Networking Tools Meet Personal Finance on Web Sites

By Wolfe, Daniel | American Banker, August 15, 2008 | Go to article overview

Social Networking Tools Meet Personal Finance on Web Sites


Wolfe, Daniel, American Banker


Byline: Daniel Wolfe

Two financial management Web siteoperators are rolling out services that expand on their efforts to combine elements of banking and social networking.

Several companies offer free Web sites that help people track accounts at multiple financial companies, and though their underlying aggregation capabilities are similar, the new services - a purchase-tracking tool from Wesabe Inc. and a recommendation site from Geezeo Inc. - are adding features designed to attract users and generate revenue.

"Personal finance is a very rich area," Marc Hedlund, Wesabe's chief executive and co-founder, said in an interview. "I don't think the question is: Is it possible to make money? I think the question is: What is the right revenue model for the business?"

Wesabe, a San Francisco company, last week introduced a way for users to track cash spending through a messaging service offered by Twitter Inc.

Twitter enables users to update others on their activities by broadcasting short posts from their computers using instant messaging or their mobile phones via text messages. The service offered through Wesabe can help people monitor their spending - even small, cash purchases that do not show up on bank statements - by sending text-message Twitter posts to the financial site.

For example, Twitter users might tell their friends they are going to see a movie and simultaneously record the ticket cost by sending another message to Wesabe.

Since the service went live Friday, Mr. Hedlund said, Wesabe has received hundreds of Twitter notices about transactions. The site can analyze purchases and sometimes even suggest cheaper alternatives, he said.

Geezeo's new features, due out next month, will permit users to recommend their favorite financial products.

Shawn Ward, Geezeo's co-founder, said the Framingham, Mass., company's system would be entirely driven by users, who would rate financial products with one to five stars, much as people rate products such as books and electronics on other e-commerce sites.

Mr. Ward said his company would get a referral fee when people respond to these recommendations by signing up through his site for some of these financial products; he would not say how much.

"As much as it's personal finance, it's really the wisdom of the crowd," he said.

Geezeo offers various budgeting tools for users, as well as online forums and articles about financial issues, and it generates revenue from advertisers.

The company got a big boost in April when the online financial news company, TheStreet.com Inc., paid $1.2 million for a 13% stake. Since then, the number of active users - people who have logged on at least three times - has grown 127%, to 25,000, Mr. Ward said, largely because TheStreet.com promotes the service on its own Web sites.

George Tubin, a senior research director at TowerGroup Inc., a Needham, Mass., independent research firm owned by MasterCard Inc., said these free sites are still trying to figure out how to turn their features into a viable business model.

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Social Networking Tools Meet Personal Finance on Web Sites
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