Last week’s Economist has an interesting article (”Crunchless credit“) on how the recent credit crunch affects peer to peer lending services such as Zopa and Prosper.

Apparently, private lenders haven’t raised their rates as much as the banks have because unlike the banks, they don’t face higher funding costs. The article highlights the intriguing point that peer to peer lenders might possibly be better at assessing risk than the bigger players.

On a related note, a new peer to peer lending site called MicroPlace launched recently. It allows users from industrial countries to invest in start-ups from the developing world.

Last week I attended “The Online Opportunity” at Microsoft’s headquarters here in London. The main attraction was that Steve Ballmer, CEO, was giving a talk about his company’s take on the brave new world of Software as a Service and doing business online in general. Microsoft Startup Zone has a video recording of Ballmer’s and all the other talks.

Ballmer reiterated MS’s “use Suse or be afraid” position on Linux, i.e. that companies should use Novell’s Linux distribution to avoid being sued by Microsoft for patent infringement (Novell is a Microsoft partner).

He also discussed the drawbacks of the “free with ads” business model and noted that Microsoft had never had much luck in monetising Hotmail. He stated that Google was having the same problems even though “they read your mail and we don’t” (a comment that surfaced on Slashdot today).

Although his performance wasn’t as energetic as on some previous occasions, Microsoft’s man in the bridge came across as sensible, pragmatic and knowledgeable.

For more comments on the event, check out the coverage by Simon Willison and Jeremy Keith.

When Bill Gross founded his famous Idealab incubator in 1996, taking an idea and turning it into a functioning business was a venture that would require funds of at least $1 million a pop.

Today, developing an application like Walletproof costs significantly less than a million dollars. This changes the game.

In Return of the startup factory, Business 2.0’s Michael V. Copeland writes about the contrast between the good old days of the bubble and the new high turnover incubators, such as Paul Graham’s Y-Combinator.

The idea is not dissimilar to that of the VC model: No one has a clue as to what business ideas will become successful, just as the Hollywood studios don’t know what movies will become blockbusters. The incubator bets on a fairly large range of ideas and gives each company a small amount of seed capital for an equity stake.

With open source software, cheap bandwidth and distributed teams that don’t need office space, the cost of failure will be minuscule compared to the return if the incubator manages to bet on and support an idea that becomes a blockbuster.

Now, the high turnover incubator has come to London in the form of Seedcamp.

Seedcamp is run by two VCs, Saul Klein from Index ventures (who also runs the OpenCoffee) and Reshma Sohoni from 3i.

Sam Sethi, who formerly edited TechCrunch UK and later Vecosys, announced yesterday that he’s launching blognation, a blog network that will report on European web start-ups.

Sam is well connected into what’s happening in the UK web2.0 start-up scene and Vecosys (as TechCrunch UK was before it) is a must-read for those who are enthusiastic about European web culture.

According to the announcement, Sam has secured editors from various European countries, including Iceland. Being an Icelandic expatriate, I found this very interesting and I’m looking forward to seeing who the Icelandic editor is.

Iceland has a strong and vibrant economy and has everything it takes to foster interesting web start-ups. Strangely enough, one of the most innovative companies on the Icelandic web is Árvakur, a newspaper publisher founded in 1919.

Their blogging platform is the country’s biggest thanks largely to how they integrate their newspaper’s website and the blogs. They even publish excerpts from the blogs in the paper itself - a powerful incentive for those who want their voices to be heard.

It will be interesting to see how blognation will fare in the coming months. Good luck to Sam and his fellow editors.

We are happy to announce that a web application we’ve been working on over the past months has launched:

Walletproof is a personal finance web application. It’s meant to make keeping a budget as simple as humanly possible.

When a user is keeping a budget he/she can recommend deals to the Walletproof community, thus facilitating the sharing of knowledge on how to save money!

Check out the flash demo of Walletproof’s functionality and the Walletproof blog, where we keep users updated on all the latest news and features.

Please note that the development of Walletproof is an ongoing process and it is currently in beta version.

We’d love it if you tell us what you think!

Magic Ink (via Jason Kottke) is an essay by Bret Victor on information design. The essay contains some interesting graphics, including a redesign of Amazon’s search result display (see: before and after).

On a related note, the newest edition of Information Architecture for the World Wide Web (IAWWW) just dropped in through the mailbox. The foreword is by none other than usability guru Jakob Nielsen. Jakob’s legendary site, Useit.com, receives far too little attention in the Web 2.0 world.

IAWWW has more than doubled in size since its groundbreaking first edition and the newest version is very up to date on the newest trends. Highly recommended.

While we’re on the theme of information design, the newest edition of A List Apart has an interesting article called Contrast and Meaning which reminds me of a book I once got hold of after seeing that Jason Fried of 37signals recommended it: Designing Visual Interfaces.