When one reviews the intermediation trends and generalizations in the Auto, Travel, and Brokerage industries, one concludes that the concept of disintermediation is useful but inadequate for describing the changes in intermediation in todays markets. This view is confirmed when one looks at other dynamic examples of intermediation. The more appropriate watchword would be "Diverse Intermediation."

It is our contention that the middleman will not be "disintermediated". In fact, a new breed of internet participants will leverage technology to streamline transactions between producers and consumers, collecting fees without ever taking ownership or delivery of the product. Forrester Research calls them Internet Transaction Brokers (ITBs) and significant internet commerce requires them to me a mediating influence between the producer and consumer. The role won’t disappear; it will just be altered. Paul Saffo expressed our sentiment very well in a recently posted TechWeb article when he said "Information technology will eliminate some intermediaries. But they will do it by creating niches for new kinds of intermediaries to occupy, who will displace the old ones."Sarkar had dubbed them "Cybermediaries" and concludes that more, rather than fewer intermediaries will be involved in electronic markets.

The New Middleman

The Internet needs more middlemen, new kinds of intermediaries, more mouths to feed along the way. We are all tied together, yet organizations and cannot do everything themselves.

Some of the most successful sites on the Net today are succeeding because they act as middlemen. What is Yahoo doing if not mediating between the consumer who wants something and the millions of places where that thing might exist?

One of the sites that touts "distintermediation" is the Internet Underground Music Archive (IUMA), which is hardly a disintermediator, just a new intermediary, offering an alternative to distribution by large record companies. They are not eliminating the middleman, but actually setting up new distribution online. ...

If you are starting a new business on the Internet, think about how you can be an intermediary. What can you do more efficiently than others doing it for themselves? How can you put yourself right in the middle of two parties who need what you do?

The existence of cybermediaries is consistent with traditional marketing theory, which views intermediaries as organizations that support exchanges between producers and consumers, increasing the efficiency of the exchange process by aggregating transactions to create economies of scale and scope.

For an alternative view that goes beyond this analysis, be sure to see our Net Worth page.

"Rules" books abound in the e-commerce literature. Therefore, we thought it fitting to offer you our own DRASTIC Disintermediation Rules.