Information Middlemen

Steve Goldstein points to a NYTimes article by James Fallows and writes:

Fallows argues that a) the rise of blogs, and b) the web-availability of publicly-financed information (weather, scientific journals, etc.) are daggers in the heart of various information intermediaries. Hes dead wrong.

Now, the most interesting things about blogs are business models and ways to aggregates them and filtering out the stuff that Fallows claims inspires despair. The need for Kinja, Newsgator and the like rises dramatically as the number of blogs increase. So, there will be a battle of the middlemen in the blog space just as there is in the SEC filing space where GSI, Edgar-Online, 10K Wizard and Disclosure survive aggregating and acting as middlemen for free, publicly-available information. Only business reasons prevent Elsevier from surviving as a middleman for scientific journals poor pricing and limited value-add.

From the NYTimes article:

Information is both invaluable and impossible to value. Historically, the main way around this problem has been to pack the results of intellectual or creative effort into something tangible that can be priced and sold: a book, a seat in a theater, an hour of an expert’s time. Technology causes economic chaos when it disrupts this packaging plan, as is now happening in the music industry. Ten years ago, if you wanted to play a song, you had to buy a CD or a tape. Now, thanks to downloaded MP3 files, you don’t – and the chaos is all the worse because the same young audience that would otherwise be buying the most CD’s is the quickest to adopt MP3’s. Publishers must shudder as they contemplate the distant but inevitable day when “electronic paper” does the same to them, making downloaded files as convenient to read as ordinary books, magazines and newspapers are today.

But while lawyers and business officials worry about technology’s effects on who will be paid, and how, for their creative efforts, the Internet’s most fascinating impact has been on those who have decided not to charge for their work. I’m not referring to the open-source movement among software designers, who by creating Linux and other systems want to establish a low-cost alternative to the world of Microsoft-style commercial software. I mean the emergence of two information sources that make us collectively richer and exist only because of fairly recent changes in the Internet.

One, believe it or not, is the world of blogs…At the democratic extreme, blogs are a nightmare vision of a publishing house’s “slush pile” come to life. At the elite end, the dozen or so best-known sites, they are an intensified version of insider journalism. If you don’t get quite enough sass, attitude or instant conclusions from the rest of the news media, you can always find more at the leading blogs.

If blogs represent the uncoordinated efforts of countless volunteer writers, another information explosion shows the institutional might of the state. Taxpayer money still is behind a surprising amount of crucial data: nearly all weather observations and the supercomputer-based models that create forecasts; most basic scientific research; most research into disease causes and cures. In principle, this publicly financed knowledge has always been the public’s property, but until a few years ago there was no easy way to get it from research centers to a wide audience. Thus various middlemen arose – notably scientific journals, which did the expensive work of printing and distributing research papers in return for steep subscription costs.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.