Started by Gio Wiederhold, 26 Jan 2000, updated 25 Feb 2002.
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;
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
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 .
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].
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.
Draft chapter mediators.html.
A view
of the Internet from a Social Science Viewpoint [Shortliffe
and Patel: 2000].
See also the
references.