Investor's Business Daily: Computers Made Plain

August 9, 1999

There's Money To Be Made From Your Data

by Julie Vallone

Fred Davis isn't worried about Big Brother. It's all those "little brothers" out there that have him concerned.

Davis, chief executive of Lumeria Inc., a Berkeley, Calif.-based software maker, thinks you also should be worried about these potential Internet intruders. Lumeria and other software companies such as Novell Inc. want to help you take control of your personal information.

"Instead of Big Brother, there are thousands of little brothers tagging along after you, monitoring every click you make on the Net and every purchase you make with your credit card," Davis said.

Davis believes consumers are sick of being spammed with irrelevant marketing pitches, and sellers always seek a more targeted audience. Helping sellers understand this will initially involve some tough love.

"We really want to help sellers," Davis said. "We just want them to behave.

Don't get Davis wrong, though. He would like to shield you from Web entanglements. Be he also thinks it wouldn't be so bad for you to dole out some of your personal information, providing there's something in it for you -- and him.

Enter the information intermediary, or infomediary, first introduced by consultants John Hagel and Marc Singer in their book "Net Worth." Singer says the word "infomediary" often is used broadly to describe companies that serve consumers and find new ways for them to get better deals from vendors.

"The narrower definition we describe in the book is that an infomediary is someone who also develops a profile and uses it on your behalf in a way that protects your privacy," Singer said.

In other words, it's like an e-agent. Here's a typical scenario: Say a consumer has registered with an infomediary and expressed interest in Asian travel.

The infomediary, at the consumer's request, will release that person's travel-related data to relevant companies. In exchange, the consumer is compensated with rewards

 

ranging from better travel deals to cash. Lumeria plans to give consumers 80% of the fees received for their personal information.

"We're the agent, we're working for you and we want to show you the money," Davis said. "It's about who serves the customers best, not who serves the sellers best."

"If (the vendor) and the consumer are on the same side of the table, there's value created both for merchants and for vendors," said Singer, "because the fact is, most advertising is wasted."

Lumeria recently debuted its online SuperProfile system. Davis describes it as a system that collects all the different profile data compiled about an individual, but with a social contract. The user, not Lumeria, owns and knows what's in the profile.

SuperProfile should be fully operational by fall. Lumeria plans to release a generic version of its program this month, called profile markup language. The company will introduce it as a potential industry standard, providing it free so vendors can create compatible systems.

Also this month, Novell plans to unveil its new Digitalme technology, which it has tested over the past few months in conjunction with Citigroup and other vendors. Like SuperProfile, Digitalme is a type of storage vault for personal data. Final release takes place in October.

Novell plans to market the digital identity technology itself, rather than move into the infomediary agent space. Still, Michael Sheridan, creator of Digitalme and Novell's vice president of strategic business, also is interested in the social element of the consumer-controlled profile.

"I think what needs to change is what we call the economic contract for the sites that collect data," Sheridan said. "If I give you something, I should get something back. Your total profile is worth the price of a printer, free Internet access and a PC, at least."