October 07, 2007, 8:49 PM — Do you remember the beginnings of the "the Web changes everything" e-commerce boom? The word dis-intermediation[1] seemed to be on the lips of everyone reading the tea leaves at the time.
It will only be a matter of time (or so we were told) before the Internet ushers in a whole new era. An era in which consumers and producers interact directly without middle-men taking cuts along the way. The Web (or so we were told) will reduce both the cost of selling and the cost of buying resulting in - gasp! - lower costs all round.
The true picture emerging (should we be surprised?) is more complicated than that. I remember some years ago booking a trip to the UK. I did it all electronically. I booked my flight directly with the airline. I booked my hotel accommodation directly with the hotel. Not a travel "agent" in sight.
Last week, I booked a similar trip. I used Google to search for hotels near my destination. Whoosh! The entire front page of hits consisted of links to - not hotels - but travel sites and virtual tourist sites of various descriptions. In other words, all my search hits were pointing me towards intermediaries...So much for dis-intermediation.
And then it struck me. I had passed through not one but two levels of intermediation before finally arriving at a place where I could book a hotel. My first "travel agent" was the search engine. My second "travel agent" was the "find a good hotel in downtown X" website.
The Web does not automatically result in dis-intermediation - even in areas where you would think dis-intermediation is very possible. It seems to me that in at least some areas, Web technology actively promotes the creation of extra layers of dis-intermediation. More "agents" than we had before resulting (surely?) in more costs all round.
It is true that these form of agents are different from ones we had before. The Web really does change everything. However the concept of intermediation is not only alive and well, but thriving in a new eco-systems that provides opportunities for intermediation that hitherto were impossible to imagine and/or prohibitively expensive to implement.
