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Day: October 6, 2006

“meta” is the new value: FreshBooks invoicing reports how you stack up

Techncrunch is reporting the new release of Freshbooks’ online billing service. Nice enough, very Web2.0 and a neat web application.

Interestingly though the new feature opens a different and possibly lucrative revenue stream: data-mining metadata –

Users are now asked if they would like to identify what industry they work in and contribute to aggregate data collection by sector. Participants will be able to see how much other web designers, for example, are charging per job, how much they make per month and are how quickly invoices are being paid. Those who participate will be able to access their individual averages over time and be notified whether or not their performance is improving relative to others.

Others have similar models (eg Hitwise accesses ISP logs to get a picture of users’ overall usage and can then report on a site’s share of that total; GfK gets the sales information from 71,000 retail outlets and so can plot prices over time…). What’s interesting is how quickly and clearly a Web2.0 business moves from a linear-scaling revenue model (where revenue = users x fee) to a related, decoupled revenue source.

The initial business models that were predicted for the web revolved around disintermediation, giving users direct access to services and eliminating middlemen.

The new model is going to be “meta data” and mining that information to provide valuable insights and benchmarking. In this particular instance the value derived from being able to anonymously benchmark your rates exceeds any concerns about privacy.

In an highly-connected, transparent world it’s not possible to hide commissions charged. We therefore have explicit, valuable services being offered separately (where previously they were bundled) and the ‘by product’ of large, transactional data sets being mined for value.