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| Net Worth, a sort of sequel to Net Gain, might better be called Fishing Net. The authors, McKinsey principals John Hagel III and Marc Singer, use their new book to trawl for consulting engagements with an audacious set of forecasts about how the Internet will develop. The authors make their bid for gurudom by predicting the emergence of Internet "infomediaries." These new entities would gather heaps of Web-based information for the benefit of customers, rather than for the companies that want to sell them things. Combining amazing certainty with a nice ring of verisimilitude, the authors make impossibly precise financial forecasts about such ventures. For example, they write: "A dominant infomediary will generate as much as $700 million in revenue by its fifth year of existence and command over $20 billion in shareholder value by its tenth. This success won't come cheaply: Cumulative investment along the way will total as much as $210 million." Not, perhaps, $211 million? Hagel (co-author of Net Gain, a successful 1997 book on the importance of communities on the Internet) and Singer also seem too sure of themselves when they assert that infomediaries will win the battle for control of information on the Internet. Certainly, the buying and selling process is so transparent on the Internet that infomediaries can gather a great deal of information for consumers about products and services and the vendors that offer them. But the reverse is also true: Information about consumers can be gathered readily. The big question is: Which side will gain the upper hand? Despite what the authors say, the answers to this key question are still taking shape. Certainly, consumers will have more power than they do now, but there may be no clear winner. In fact, the power relationship between buyers and sellers may differ by industry, based on the kind of information and product that are involved. As the authors themselves point out: "Trusting a company to provide the best soft drink, computer, or retail experience is very different from trusting it with information about how much money one makes or whether one is seeing a psychotherapist." The authors say that "infomediaries" are likely to emerge from a strategic combination of information among existing Internet and traditional businesses. On the Internet side, an impressive amount of information could be brought to bear by high-traffic portal sites such as America Online, community sites such as iVillage, and big sellers such as Amazon.com. Among traditional businesses, the authors say, infomediaries could strike alliances with information-rich associations such as the American Association of Retired People, financial institutions such as Citigroup, database companies such as Equifax, and direct marketers such as Fingerhut. But why should, say, AOL or Amazon start collecting information on behalf of customers? Typically, a company has to decide whether it's going to be an agent for buyers or for sellers, so helping launch an infomediary could mean a company would have to stop collecting information on consumers for themselves and other sellers. Knowing your customers, and having a tight relationship with them, is a goal for every Web site. Indeed, Web sites are valued on the basis of how many regular subscribers, or customers, they have. So I doubt that infomediaries will form quite as the authors suggest. And yet, and yet.... Despite the sometimes annoying smugness of the book, the authors likely are correct in their basic premise. Information can be gathered easily on the Internet and is clearly valuable—witness the advent of FreePC, which offers a gratis computer in return for information on customers and permission to track their Internet behavior. It's also easy to imagine customers having infomediaries negotiate on behalf of some number of them to get a group rate from BMW or Mercedes for a luxury car. (My wife, Tekla, did a similar thing on a small scale. She and two friends agreed to buy Acura Integras from the dealer that gave them the best deal. They got a great price.) So, there's no doubt infomediary attempts will be made. Entrepreneurs will try anything on the Internet, and this idea is as good as most. Theoretical stock-market valuations in the billions are sure to grab the attention of entrepreneurs, investors, corporate executives—and consultants.
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