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Networld + Interop Tokyo:

Internet has a place for middlemen after all

By Rob Guth, IDG News Service, Tokyo Bureau
SunWorld
August  1996
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Tokyo -- Bucking conventional wisdom that the Internet will do away with the dealers and distributors found in the markets of the physical world, an electronic commerce pioneer said that there will be a need for middlemen in cyberspace -- as long as they can add value.

"I don't think that the Internet is a straightforward extension of today's marketplace," said Marty Tenenbaum, founder and chairman of CommerceNet, the U.S.-based electronic commerce consortium. Tenenbaum spoke to attendees at the Networld + Interop show in Tokyo in late July.

"Two to three-hundred years of gatekeepers are going to be gone -- swept away," he declared.

Since the Internet provides a direct link between customers and suppliers, the traditional retail channel won't be needed, according to some industry observers.

But while many Web-based businesses such as bookseller Amazon.com have successfully bypassed traditional distributors, the entrance of several Internet-based brokers shows that the Web may provide an entire new breed of middlemen, said Tenenbaum.

There are several examples of middlemen who add value, and a layer, to the customer/supplier link, he noted. These include Andersen Consulting's BargainFinder Agent, which searches online for the best price of a product, and the World Wide Web Firefly service, which can find music CD titles that might fit a customer's taste by searching for patterns of purchases made by other customers.

"The new Web businesses are about to be bypassed [by value-added brokers]," said Tenenbaum. "Middlemen have to add real value."
--Rob Guth, IDG News Service, Tokyo Bureau


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