Banks 2.0

When most people think of Web 2.0 applications like Facebook, YouTube and Myspace, they don't really equate them with big business and high finance. But that doesn't mean the banks aren't dipping their toes in the water. The banks are moving into Facebook, with both RBC and TD sponsoring their own personal finance-related groups to try to court new, young customers. I sort of find the idea of stodgy old banks starting a toehold on facebook kind of funny, but it's serious business for their perspective. If You can't get Mohammed to come to the mountain, bring the mountain to Mohammed, I guess. TD's group boasts more than 10,000 members, so maybe it's working.

Me? I have my doubts. When I hear the word "YouTube," I think of an inexhaustible catalog of videos of dudes getting hit in the crotch. Not exactly the kind of "sound investment" I like to put my money into, but what do I know? Market darling Google thought enough of the potential to slap down $1-billion to own YouTube outright, and who am I to disagree. Then, last week, Microsoft bought a tiny ownership stake in Facebook, in the process valuing the company at more than $15-billion. I have my doubts that Facebook will be able to maintain its popularily with users once the endless parade of unsolicited "friend requests" from commercial entities start flooding inboxes, but I've been wrong before.

From an investing standpoint, I wouldn't touch these companies with a 10-foot pole, but once the baby boomers have been squeezed for every penny they're worth, the industry needs to move on to the next generation of financial illiterates.

The fact that they're all hanging out on facebook at the moment might be as good a reason as any to stake your ownership claim, or failing that, make sure your product is being pitched with reckless abandon on it in the interim.

It's happening before my very eyes. All in know is this -- some people are going to make a lot of money in this trend, and some will lose a ton. Whether it's shareholders or facebook users that are left holding the bag remains to be seen.