Weatherbill explained in under 3 minutes.
David Friedberg, Weatherbill’s CEO was on CNBC yesterday explaining the ideas behind Weatherbill.com to the world:
A longer (audio) interview (20 minutes) can be found here. (Thanks to JD for the pointer.)
There has been some noise around the idea that businesses hedging weather risk with Weatherbill online is akin to gambling. If you are interested in my views on the semantics of investing / hedging / risk management / gambling / etc. I would refer you an earlier post. But quick and dirty: if the same business hedges it’s interest rate or credit or currency (etc.) online with the CME or an investment bank, is that gambling or prudent risk management? Making the distinction according to the underlying is just plain non-sensical. Especially when the underlying in this particular case – the weather – is probably the risk underlying that can be least influenced by the actions of market participants (well you can always try I guess! 
). You can buy all the warm days you want, but it won’t make the sun shine any harder.
Anyhow for most small businesses – and many large ones – their financial exposure to weather risk is probably an order of magnitude higher that their exposure to interest rate or equity market risk, the opportunity to manage this pro-actively will be – like for other financial risk management tools before, only moreso – a significant advantage insofar as it reduces business risk, financial volatility and as a result the cost and efficiency of capital. (Which means higher productivity, more prosperity, greater wealth, more jobs, etc. etc.)
Small and medium size businesses are the backbone of most (all?) modern capitalist economies; the democratisation of risk management tools via new information and communications technologies will be a powerful factor underlying the next phase of growth and wealth creation in this century.
***Update***
BusinessWeek gives its take on Weatherbill.
