A visit to the Edmund's site shows how hard it will be for all kinds of manufacturers and distributors to maintain profit margins, given that they are moving into a world where consumers will have access to all information about their pricing. Fortunately, a visit also suggests new ways of earning money—as well as how to save when you buy your next car.

Edmund's had been a sleepy, niche publisher for decades. It gathered pricing information on cars, based on leaks from distributors, and published the information quarterly in a book that cost a few dollars. Readers learned, for instance, about rebates that dealers received to promote certain cars, to reward high volumes of sales, etc. The book also contained reviews of the cars, technical data on them, and information on how well they were selling. Armed with the information, readers could drive an extra hard bargain.

When the company changed hands seven years ago, it began a charge into "marketspace"—the on-line equivalent of the physical market. Over time, Edmund's greatly expanded access to its information by making it free over the Internet. Edmund's now attracts 50,000 users a day to its site, and volumes will continue to grow as Internet use expands, putting more and more pressure on dealers and car makers.

The Edmund's site works so well for three reasons that could apply to other sites and other industries: Edmund's generates trust; it is moving toward what is being called "permission marketing": and it works within the current approach to buying and selling.

With Edmund's, trust was easy. It had spent decades generating a reputation for solid information. For other companies and other brand names it may be harder, but it's pretty obvious that no information-based business can succeed unless users trust the information.

Edmund's maintains this trust, while still making money, by using "permission marketing." Edmund's doesn't capture the identities of visitors and then barrage them with e-mail or junk mail, as many companies do; instead, it asks for permission to provide additional information. If someone identifies himself as a potential buyer, Edmund's passes his name over the Internet to another company, Auto-by-Tel, which has a local dealer contact him. The Edmund's site also suggests that customers phone Geico, which will provide insurance quotes to anyone calling an 800-number.

It's crucial that Edmund's hasn't forced consumers to change the way they buy things—a critical issue that explains why many of electronic commerce's failures. Customers still familiar with Edmund's still see the same information in roughly the same way, and all customers still go through the normal car-buying process. The arrangement with Auto-by-Tel works within the normal system at car dealers, which have long had budgets to pay for qualified leads. With Geico, Edmund's experimented with having customers fill out forms on-line and get insurance quotes automatically, but customers wanted to start with a ballpark quote and didn't like having to fill out long forms. So Edmund's returned customers to the situation they were used to seeing.

When Edmund's started giving away its information for free, it seemed to be gambling. In fact, even sales of the book have soared-by 50% over the two past years. Edmund's revenue is doubling every year because it has also become a broker, charging a fee on every qualified lead it passes on to Auto-by-Tel and Geico. Those companies are more than happy to get the leads because someone expressing in a product is many times as likely to buy the product as someone who is approached cold.

The principles of Edmund's brokering approach apply to all sorts of businesses. Companies that have a solid brand and that find themselves in businesses with overcapacity and turmoil may even find that they can make more money by selling information on their business than they can on the business itself.

The flip side of this opportunity is that, whether you want to sell information on your business or not, someone will. So suppliers in just about every industry are going to have to find new efficiencies and new ways of learning what customers want if they are to compete in an environment where they can no longer hide anything. Your business better be good-looking naked, because before long and Edmund's is going to come along and take its clothes off.

Sviokla is a professor at Harvard Business School, known for his writings on "marketspace.". He can be reached at jsviokla@hbs.edu.

THE BATTLE OF THE LIGHTWEIGHTS

The idea of technology convergence keeps producing devices that are smaller and more functional, producing a heated contest for" share of briefcases."

THE PAGER/PHONE

In the land of the lightweights—we're talking ultra-ultra-lightweights—Qualcomm has introduced what it calls the Q phone, which is a pager and a cellular phone wrapped into one. The device has all the standard phone features and looks much like a small phone. It is palm-sized, is shaped like a clamshell, and weighs just 5.7 ounces. But the device also has a readable, five-line display, and, like a pager, can be set to vibrate when a message arrives. The Q phone also has menus like pagers, which can be controlled through the cellular phone keypad.

The phone seem to be almost a second attempt at two-way paging but without most of the drawbacks of the first try, which came two years ago. The first attempt, by SkyTel, allowed someone to page a person with a question such as, "When will you be home?" and offer a few options, such as, "one hour, two hours, never." The recipient could then click on one of the boxes, and the pager would send the information back to the person who asked the question.

The effort failed partially because of problems with the technology but also because users didn't want to be limited to just a couple of responses; they wanted to be able to call back. That's why so many people still carry both a pager and a phone.

Failures like SkyTel's have given convergence a dodgy reputation in some quarters. That is especially so because, in the 1980's, convergence led to be one of the great non-events of recent business history—the supposed battle between AT&T and IBM over a combined computer/communications market. AT&T agreed to be broken up in the mid-1980's largely in the name of convergence. The breakup allowed it to get into the computer business, and AT&T was convinced that telecommunications and computers would converge at frightening speed. IBM bought Rolm, a maker of switches, for the same reason. The idea made some sense. Switches are, after all, just specialized computers. But there are so many things that have to happen—in software, in customer buying patterns, and so on—before multimillion-dollar systems like central phone switches and mainframe computers will closely resemble each other that the battle was never even joined.

AT&T broke up yet again, partly to put the computer disaster behind it. And IBM meekly sold off Rolm.

For the foreseeable future, the benefits of convergence will more likely be a device costing hundreds of dollars rather than millions. Something like the Q phone may not have the global import that a battle of AT&T and IBM would have had, but at least it has a clear benefit. It will take a little weight out of your briefcase or pockets and give you one less thing to misplace.

For more information: www.qualcomm.com

THE PAGER/WATCH

If you don't want to turn your phone into a pager, how about your watch? Because Seiko's Message Watch is the size of a normal digital watch, the display is fairly small, but the watch can receive e-mail messages, stock prices, sports sources, and so on. The watch, which cost $130 to $190 depending on the model, updates itself to atomic time 36 times a day and will automatically change the hour when you move between time zones or the country switches between daylight and standard time.

For more information: www.seiko.com

GETTING ORGANIZED

If the motto of the digital age is that you can't be too smart or too thin, then the latest Personal Digital Assistant is a real move forward. The device, called REX, has just about all the standard features of a PDA but at a fraction of the normal size. While most PDAs look like small notebooks, REX weighs 1.4 ounces and is only a bit bigger than a credit card.

The device-produced through a joint venture between Franklin Electronic Publishing, Starfish Software, and Citizen—fits in what's called a PCMCIA slot on a notebook computer. REX can also be hooked up to desktop computers to download calendars, phone numbers, even brief memos. REX's screen has received good reviews for its readability, and it will run for six months on two lithium batteries. At $130 to $180, REX also costs about half what many PDAs cost.

The main drawback is that it isn't possible to enter information directly into REX. That has do be done through a computer. Because REX doesn't have the stylus and touch screen that are standard in most PDAs, it can also be a bit harder to get information stored in REX.

Still, it's not too hard to imagine REX or something similar having wide appeal. At the moment, many people carry around three keypads and screens—on their pagers, cell phones, and PDAs. So it seems likely that, before long, we'll at least be offered the chance at a phone that receives pages and that, through a REX-like attachment, includes a personal phone book.

For more information: www.franklin.com, or www.starfish.com

JANGOISM

While electronic commerce between businesses has taken much faster than on-line sales to customers, software companies keep chipping away at the problems that are preventing consumers from buying more. Jango, from Netbot, marks real progress.

Jango provides intelligent, electronic shopping assistant that makes shopping on the Internet pretty straightfoward. You find the product category you're interested in buying, whether it's coffee, cigars, or golf equipment, and then describe what you're interested in buying. Jango goes off to search all the manufacturers' and retailers' sites on the Web and returns within minutes with the most current information. It presents the information as part of a report that's designed to help you make a buying decision. For instance, possible purchases are listed from lowest to highest price.

You can visit a store to buy an item, or you can make a quick buying decision while still on the Jango site and have Jango help you fill out the order form. Jango's software holds credit card numbers, shipping and billing information, and other details needed to make a purchase. When you are ready to buy something on-line, Jango provides all these details automatically.

The key to Jango is found in the concept of the "netbot," which was developed by computer science professors at the University of Washington's Internet Softbot group. A netbot is different from Web search engines like Excite and Infoseek and directories like Yahoo because it can search visible information (codified and catalogued) and invisible information (product information embedded in a Web site) throughout the Internet.

Jango has competitors, such as a service called RoboShopper, but analysts said Jango is much better at streamlining the buying process.

"Just point, click, and spend," according to wry analysis of Jango on Andover.Net Sites. "Poof! Just like that you're one step closer to the poorhouse."

For more information: www.jango.com

GETTING OUT THE VOTE

If there's one type of vote where turnout is even worse than presidential elections, it's corporate elections. Many stockholders just find it too much bother to mess with the proxies.

Microsoft is trying a bit something different. It will send out proxies out to shareholders over e-mail and will link the proxies to a secure Web site, where holders can vote their shares. Annual reports will also go out over e-mail and will include "an interactive report builder" for analyzing Microsoft's financial results.

For more information: www.microsoft.com/msft/