CS99I Meeting 14 Notes: Mediators

Started by Gio Wiederhold, 26 Jan 2000, updated 25 Feb 2002.

Topics Covered briefly

Information architecture on the web.

Simple view:

Very many clients <---->  many suppliers

Direct connections -- disintermediation -- are nice, cheap, but many useful services (store personnel, travel agent, librarian, ... expertise,  is lost.

Problems;

  1. How to find a suitable supplier in terms of goods -- tools now are browsers, XML based systems
  2. How to find the best supplier: quality, price -- tools now are ranking schemes, comparison services
  3. How to integrate information: -- not yet well handled , a major opportunity for new services

Consolidators and Mediators

Combining information is a powerful approach to increase the value of information.  There is much data and base information that becomes more valuable in concert with other information, i.e., can lead to action.  Integration tools mediate between the Clients and the Suppliers:

Very many clients <----> a bunch of mediators <---->  many suppliers.

Mediators become more valuable when the add more expertise.  Deep expertise is often domain specific. We can put some examples in sequence

  1. The best price -- a simple, and broadly used domain
  2. The best quality -- say a movie. Here many of us (think we) are experts can sahre experyise -- say Epinions.com
  3. A suitable case for your laptop computer -- here dimensions play a role.  Still formalizable, but less common.
  4. A low-noise VGA projector -- many supplier sites fail to provide that information, so deeper search may be needed
  5. Airline connections: Much documented for travel agents (official Airline guide), includes likely transit points to switch among airlines (London, Frankfurt, Amsterdam, Paris in Europe, but not all combinations -- too many). Also some additional knowledge can be useful (Easyjet, an Internet-only-booking airline is not listed, can provide best connections London-Geneva)
  6. A convenient train to the airport connecting to your flight -- Knowledge that Milbrae is the Train stop for San Francisco Airport, and that Milbrae can be reached from Stanford without going to the city of San Francisco. A local travel agent may know that, but not one based on the EastCoast. 
  7. Shipping goods across the country: linking truckers, railroads, airfreight shippers, warehouse capabilities, etc.  Requires understanding of many factors, as weight, size, fragility, value of speedy delivery, value of reliable delivery at destination - do you or a crew have to be there?

Such services are provider by consolidators (businesses, similar items) and mediators (software, dissimilar items). Software is needed when the tasks are harder, and specific to a customer need.

The knowledge in a mediator can remain valuable since only the results are shipped to the clients, not the knowledge that produced the results -- although it may be inferred. That makes for a better business model -- see updated Meet12Notes .

How will the market split up

Unclear is the trend of broad-based (YaHoo, AltaVista) versus focused, In-Context (iVillage, DiabetesWebSite.org) access points. InContext commerce has many benefits, in that there is less irelevant material. In-context commerce makes it possible to monetize a customer base with other commerce and content. If a domain aggregator gets 5 million loyal affinity customers, it is powerful. (similar to a specialized magazine).

To survive, sites need Barriers to Exit, as deals, community spirit, etc. Now AOL earns 70% of income from subscriptions. But when access can be free, what happens? (Can AOL become just an infrastructure provider?)

A simple customer incentive is free Internet access. But what comes then? See All-Advantage, since May 1999, now 2 M customers, 400 employees. Profitable in Sept 1999. Business model pay users 50c per hour. Also make money when referring people `multi-level business model', discourages exit.

Now unstable equilibrium. [Bill Burnham].

Who participates now in Electronic Commerce

Burnham expects mass marketification of B2C in the US. Soon most users will have free ISP accounts. Now mean income of Internet users is $75K/year, but that market is\getting saturated. Non-participants may be older. Growth will be now in the lower income mass-market ($20K-40K). Pricing for that category will become more important, and they will have lower service expectations. For example: 1/3 of Walmart customers check prices at Target and vv.

Notes

Draft chapter mediators.html.

A view of the Internet from a Social Science Viewpoint [Shortliffe and Patel: 2000].

See also the references.