The New Middlemen in the Networked Economy

As place and time become increasingly irrelevant in the networked economy, vertically integrated mediators will find their franchises eroded by specialised mediators. These will offer better products and services at lower costs than full-service mediators. But in doing so, customers will be faced with a dizzying array of specialised product and service providers. Mohanbir Sawhney argues that this will in turn result in the emergence of "metamediaries", who will reassemble the offerings into bundles that are logically related from the customer's perspective. Metamediaries will reduce customer search and evaluation costs, and dramatically improve the efficiency of networked commerce transactions. Ultimately, they will make frictionless commerce possible. Further, disintermediation may not reduce the total cost of the transaction because it shifts some channel functions to customers. Customers need to search, evaluate, negotiate and configure products on their own, in the absence of mediators. To reduce the total cost, new mediators will be needed to assist customers in the search and negotiation process leading up to the transaction.