Two financial management Web site operators 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. Sincethen, 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.
Advertising and referral fees offer more potential than charging users, he said. "I don't think you're going to get individuals to pay for this, especially the individuals that they tend to be attracting, because they're individuals that get that stuff for free and are used to getting that stuff for free," he said.
A potential avenue that looks untapped is selling the data collected on users' habits. This information could be aggregated and sold in bulk, Mr. Tubin said, which should avert privacy concerns, and "that data is invaluable."
Mr. Hedlund recognized that questions remain about how a free site like Wesabe can generate revenue. His company has not disclosed how it makes money. Though he said this week, "we feel we have a fantastic idea," he would give no details.
Other concerns arise about these evolving companies.
Mr. Ward said that, since Geezeo will have no control over how its users rate various financial products, he will need to ensure that the site does not appear to be endorsing specific banks in exchange for a fee.
Users will be able to post comments, he said, which should make it clear that the rankings come from real people.
"We have no control over highest-rated products," he said. "What we need to make sure is, we're not promoting those companies that are giving us the highest bounty" for referring users.
And Mr. Hedlund noted that users might have security concerns about sending transaction details through Twitter. "Twitter is not a banking site, and it doesn't have the same security," he said. Notes sent on spending on movies or coffee are probably safe to upload, but payments for doctor visits or bail bonds should probably be kept off the Twitter system, he said.
TowerGroup's Mr. Tubin said that, despite his questions about how the companies generate revenue, he is impressed with the ways they have been able to turn social networking into financial tools.
Wesabe's Twitter features "will definitely be attractive to a segment of the market" that wants to track spending without a check register, Mr. Tubin said. And Geezeo's recommendation service could prove disruptive to banks, if the user-written reviews of specific financial products spell out various fees more explicitly than the banks do in their own advertising.
"I welcome this kind of stuff because individuals just don't get the opportunity to understand how a financial services company operates," Mr. Tubin said.
If the Geezeo recommendation site takes off, bank customers could shop for financial products just as they do for appliances in department stores: by doing side-by-side comparisons of various providers and getting feedback from others on how various products compare to each other.
Mr. Tubin said that, because they are new, companies like Geezeo and Wesabe do not feel the same business pressures that banks do and, thus, are free to experiment.
"They're in an enviable position that banks aren't in," he said. "Everything they do doesn't have to be a home run."
