The Network is the Infomediary – 10 years later

Ten years ago, John Hagel and Mark Singer published Net Worth, a visionary book describing an opportunity for companies to take advantage the internet-fueled trend toward customer power by managing customer data on behalf of customers. At the time, I wrote a critique, The Network is the Infomediary predicting that the “infomediaries” would arise from social networks that participants trust to manage their data for them.

Hegel and Singer predicted that the Infomediary business would be a single application handling household purchases — something like a cross between a butler and a corporate procurement application. The SAP of household purchasing would cover every aspect of household commerce, soap and travel, housing and entertainment, requiring a vast customer base, and huge information processing infrastructure. The infomediary would will have “lockin” over customers because they have gathered so much customer data.

At the time I thought that the “monolith” scenario was unlikely because consumers would be unlikely to trust the behemoth. It seemed more likely that infomediaries will grow out of networks and communities. At the time, though, the leaders in the online community business were far from being worthy of community member trust. Providers like AOL and Geocities, Amazon and Yahoo were doing a poor job of protecting participants’ data.

Where are we now

The 1999 essay has held up remarkably well. I still believe networks are the seeds of infomediaries – but the universe described hasn’t quite arrived yet. Social networking has grown and flourished, and is developing more tools and practices for customers to express preferences to vendors. Twitter is showing some dramatic examples of online expression of customer feedback (think #amazonfail). Yelp has product reviews and rather embryonic social networking. Social media monitoring helps aggregate consumer feedback from individual viewpoints across social networking services.

The biggest social networking service, Facebook, still hasn’t proven itself trustworthy as a steward of data for customers. However, the power of their networked customers has helped pull them away from practices that customers perceived as abusive, including using browsing behavior without consent, and terms of service that take ownership of customers’ contributions.

And there still aren’t good ways for people online to weigh in, and to have feedback be cumulative, and to have that feedback be weighted by data about what people actually do. And there really aren’t good ways for people to express affiliation with a community to have their voices count more.

Most of recent action these days is around the realtime. Aardvark and Hunch let people ask the community for advice. But we’re not yet seeing tools that enable customers to organize to request service from vendors. But realtime is just the tip of the iceberg. Realtime can help fix a problem but can’t create alternative solutions. For example – I recently organized a Drive Less Challenge for Menlo Park, CA and surrounding communities. We had a network of people participating in a contest to do less driving alone for the week after earth day. People did what they could, and also observed barriers to driving less. Where aren’t there enough bike racks? Where do people need shuttles to the train? How many people are scared of putting their bike on a bus? It would be great to aggregate that feedback and make it available to service providers.

What did I miss
In the 1999 essay, I probably underestimated the ability of analytics to scale to the level needed to run an infomediary application. But I’m still skeptical of the “strong AI” required for an agent to make purchases on personal buyer’s behalf. Browsing and asking for human recommendations is a learning process – I often change my mind based on browsing – and I don’t want to cede browsing to a bot.


Paul Saffo says never to mistake a clear view for a short distance. The vision that the internet will reverse the power balance between marketers and customers, popularized by Esther Dyson in the 90s, is now getting a step closer to realization. Social networks and social media are a key part of realizing this trend, but the tools and practices to make it happen are still in an early stage.

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