Aggregators

views updated

AGGREGATORS

The Internet is a vast sea of electronic information. However, to be of any value that information must be combined in ways that end-users find meaningful and useful, or in ways that bring buyers and sellers together in new ways. Aggregators, of which there are several kinds, play an important role in making this happen.

Web aggregators combine information—including sports scores; weather forecasts; articles from different newspapers, magazines, and trade journals; financial information; and even applications—and either display it for all to see or sell it to other companies through syndication for use on Web sites or corporate intranets. The format in which aggregators deliver information can vary, and may include full text, HTML (hyper-text markup language) links to headlines, rich media (pictures, video, and sound) and formats for wireless devices like mobile phones or personal digital assistants.

Companies need information of this kind to make their Web sites interesting. By providing added value, visitors are likely to visit a site more often and stay longer when they do. By contracting with only one or two aggregators, companies can conveniently and cost-effectively obtain information from hundreds of different sources. Jupiter Communications has estimated that online content licensing revenues will climb from $126 million in 1998 to $1.5 billion by 2004, according to Searcher.

Another type of aggregator brings large groups of buyers and sellers together in an online marketplace. In the early 2000s, one such example was Chemdex, an aggregator in the life sciences industry. Its customers were technicians who often searched for chemical compounds and antibodies in different paper catalogs. By allowing them to easily search for more than one million items from different vendors at one Web site, and in several different ways, Chemdex saved its customers time and money.

A variation of this kind of aggregation involved small business owners and consumers joining together to get better rates on things like long-distance telephone service. Group purchasing enabled all of the individuals to get better rates than they could have obtained separately. One business-to-business aggregator,Demandline.com, combined similar requests for services—including retirement plans and Web host-ing—from small business owners and used a reverse auction approach to obtain rates normally reserved for larger corporations.

Aggregators are as varied as the information they aggregate, or the environments in which they operate. Because there's money to be made by introducing buyers to products and information, aggregators will likely remain key components of the e-commerce environment.