The web offers businesses almost unlimited commercial potential. The primary thing limiting that potential, however, is trust (or, rather, a lack of it). How do I do business with a stranger online? eBay has come up with its own answer, but it hasn't worked out as well as hoped, as Nick Carr notes:
By providing buyers and sellers with a simple means for rating one another, eBay has been able, we've been told, to avoid lots of rules and regulations and other top-down controls. The community, built on trust and fellow-feeling, essentially manages itself. Tom Friedman, in his book The World Is Flat, voiced the common opinion when he called eBay a "self-governing nation-state."
Nice story. Too bad it didn't work out.
The reason is self-interest, which doesn't always mesh well with other-interest. This is absolutely a problem with impersonal systems like eBay. It is not, however, a problem with true social networks (which map one's social graph, rather than promiscuously adding "friends" Facebook-style).… Read more