One of the most fascinating aspects of the Internet is how it disrupts and or creates new businesses. One of these areas is lending.

The Wall Street Journal had a good summary of the business last Wednesday entitled "Online Lending Gets Easier And Safer." Writer Jane J. Kim summarized what online lending is all about. "The sites, often marketed to borrowers as lower-cost alternatives to credit-card and unsecured bank loans, match people who need small loans with willing lenders. Some firms, such as Prosper, function like an eBay-style marketplace to determine the interest rates that borrowers are willing to pau and lenders are willing to earn."

I checked out Prosper and was fascinated with the business model. It is very easy to sign up as a lender or as a borrower. The FAQs are simple and to the point. I can see millions of people getting involved in this marketplace in coming years. The model is so efficient that I would think companies such as IAC and eBAY might want to acquire some of these companies before the price gets too rich.

Zopa is another company in the field. Zopa's strength to date has been in the United Kingdom but it is now expanding to America and elsewhere.

This is going to be a hot Internet segment.