Crunch opportunities

Credit crunch stories saturate the media. The lack of venture funding for web start-ups is well reported. There is, however, less coverage of the opportunities that an economic down-turn presents to web businesses.

An economic adages regularly trotted out in news stories is that taxi drivers often feel the first effects of recession, as punters become less free-and-easy in hailing black cabs, and more inclined to stick to public transport. Inevitably, taxi drivers and many other businesses must suffer when belt-tightening starts. But surely there are some businesses well-positioned to seize the opportunities frugal consumer attitudes present.

I started thinking on this when I read about Skydeck, a US start-up. It gives mobile phone users a mechanism to automatically analyse their bills. Skydeck, say that in the future they aim to: "introduce a range of products and services that will help consumers and small businesses to get maximum value out of their cell phones". The mechanism seems clear - combine a thorough statistical analysis of mobile use with a screen-scraper for operator tariffs, and you have a way of telling users which plans best suit them. Encourage those users to click through from your site to move to a new, cheaper operator, and collect the commission. It might not make millions, but it doesn't cost much more than the hosting and software development fees.

Commission-paying websites might also benefit from struggling markets. If you have a combination of e-commerce sites fighting for dwindling business and customers looking to cut costs, then services that introduce the two, like TopCashBack and Quidco, can profit. The same is true of the raft of sites that gained popularity and extensive media coverage in the lead up to the unfair bank charges case that reached the courts in early 2008. Moneysavingexpert is a good example of a site with a large following. Although its goal is to help consumers save money, there is an underlying business model reliant on users clicking-through to acquire the featured financial products that best fit their circumstances. A site like Moneysavingexpert already has a large active user community, and the more that community contributes the more it benefits, as the best and worst deals get exposed for others to enjoy. Equally, with consumer credit harder to come by, it goes without saying that social lending sites like Zopa have a chance to prosper.

If Moneysavingexpert and Zopa are seen as sophisticated social networks, it is perhaps easier to see where web 2.0 sites can make money. And that itself raises questions about the long-term viability of sites that offer individuals a way of interacting with each their peers, but nothing more.