Long Tail Tourism: Implications of the distributed business model for the tourism and travel industry

 

 

Alan A. Lew

Dept of Geography, Planning & Recreation

Northern Arizona University, Box 15016, Flagstaff, Arizona 86001, USA

Tel: +1-928-523-6567; Fax: +1-928-523-2275; Alan.Lew [at] nau.edu

 

Presented at:

The 2nd Tourism Outlook Conference,

4-6 December 2005, Shah Alam, Selangor, Malaysia

 

Published in:

(2006)  N. Othman, ed., Conference Proceedings: The 2nd Tourism Outlook Conference – Tourism Edge and Beyond, pp. 26-38, Shah Alam, Malaysia: Universiti Teknologi MARA

 

 

Long tail economics is a new perspective on economics of small, independent and individual businesses and activities, as opposed to large scale, multinational mega-corporations.  The issue is how a multitude of small, independent operators can compete with large mega-operators, or whether they should even try. The long tail economics approach focuses on creating a multiplicity of niches that cooperate through open source communication and technology systems that foster the innovation and diffusion of ideas. This occurs within the new economy of the Internet, and is part of evolution of the new tourism that was first postulated at least a decade ago (Poon 1989). 

 

Long Tail Introduction

 

Anyone who is familiar with standard probability distributions, such as the Bell Curve, is also familiar with the long tail.  The long tail is that part of a statistical distribution that is somewhere greater than one standard deviation (68.2%) out from the mean (Figure 1).  It is the part of the Bell Curve that tapers off into infinity, away from the high frequency mass of the distribution.  Other terms that have been used to define the long tail include “heavy tail distributions,” “power-law tails,” and “Pareto tails”  (Adamic and Huberman, 2002; Wikipedia 2005a).   The law suggests that “that small occurrences are extremely common, whereas large instances are extremely rare” (Adamic 2005).

 

 

Figure 1.  The Bell Curve

 

 

 

At the center of the Bell Curve is a small population of items that occurs very often.  At the outer adage of the long tail is a vast population of events or items that appear individually on only rare occasions.  What is interesting, however, is that if we take all of the items and events in the long tail, they can sometimes comprise the majority.

 

The Bell Curve is actual a two-tailed distribution – one tail on the left (below) and one tail to the right (above) of the mean.  Figure 2 shows a one tail distribution, which is often the focus of long tail economic discussions.  The long tail is the grey colored area to the right of the black area, which is sometimes referred to at the “fat heard”.

 

 

Figure 2. One Tail Distribution

 

 

 

The long tail has gained increasing interest in recent years among economists who see it as a new model upon which we can understand many emerging markets and new business models in the 21st century (Brynjolfsson, Smith, and Yu, 2003).  The most commonly cited examples of businesses based on long tail economics are Amazon.com and eBay.com.  eBay is the world's largest online auction web site.  It is said that virtually any item in the world can be found for sale on eBay.  In fact, in 2004, eBay had more than 104.8 million registered users worldwide, who listed almost 1 billion items for sale, that generated more than US$32 billion total sales (USA Today, 2004). Many of the items posted for sale on eBay are not immediately sold and are not even bid upon because their demand is so low.  However, there is a demand.  These low amplitude products comprise the long tail, and eBay may be the most successful long tail aggregator yet. 

 

Amazon.com, the world’s largest Internet retailer, started out as a book seller, and books still make up a large part of this now highly diversified company's sales (2005a).  If you go to the books section of Amazon.com, you will see that every book is rated according to how many copies halves been sold (2005b). In terms of books, more than 30% of Amazon are in books that are below its 130,000 top sellers (Anderson 2004; Economist 2005). As one former Amazon.com employee stated, "we sold more books today that didn’t sell at all yesterday, than we sold today of all the books that we did sell yesterday." That is, on any given day, most of the books that Amazon.com sells are books that did not sell on the previous day.  These are all books that are part of a long tail.  They are not best sellers individually, but collectively they far outsell the best sellers.

 

What the example of eBay.com and Amazon.com illustrate is the highly diverse and individualistic tastes and preferences of consumers today.  The argument of long tail economics is that low demand and low sales volume products can collectively exceed best selling and blockbuster products, given the right market distribution channels.  If one can leverage this phenomenon, then more revenues can be generated from the long tail and from the fat head.

 

The long tail market

 

The long tail market has huge potential.  However it is highly distributed and highly individualized.  Therefore, accessing it requires marketing and distribution channels that are both broad and deep.  To sell relatively less popular products requires being able to store smaller inventories and being able to minimize distribution costs.  It also requires a new way of thinking.  To only seek the highest volume, such as the most tourists, is fat head thinking.  It assumes that volume equals value.  Long tail thinking requires a focus on niche markets and value measured by the perception of the individual consumer.  In a niche market, volume is assumed to be small and specialized, and success is measured accordingly.

 

Long tail products address the interests of small, minority market segments. They give all consumers greater choice because they help maintain and grow the diversity of choices available.  They work at the edge, where they can help preserve disappearing traditions, and sponsored new innovations.  The long tail edge is where new communities, experimentation, risk and opportunity, and scalable and flexible solutions exist.

 

At the opposite end of the one-tail distribution, fat head products meet the interests of majority market segments. Because of their focus on volume, they only give consumers the most popular choices.  They tend to emphasize the lowest common denominator among the largest population of consumers.  As such, they stifle diversity and provide only a very conservative approach to innovation.  The fat head “center”, in comparison to the long tail, is stodgy, stability seeking, and unexciting -- according to long tail advocates (Anderson 2004).

 

The post-tourist as a long tail phenomena

 

For over two decades now, tourism researchers have been discussing tourism in the context of globalization and technological change.  This has often been referred to as the “new economy.”  And within the new economy, distinctions between mass market tourism and niche market tourism is not new.  Poon, in 1989, wrote:

 

The economics of the new tourism is very different from the old -- profitability no longer rests solely on economies of scale and the exploitation of mass undifferentiated markets.  Economies of scope, systems gains, segmented markets, designed and customized holidays are becoming more and more important for profitability and competitiveness in tourism.  (Poon 1989)

 

In more recent years, several authors have expanded upon these ideas to suggest that the old forms of tourism were part of the era if modernity (16th – 20th c), and that the new tourism was an aspect of postmodern society (late 20th c to present; Harvey, 1990, places it at 1972; seel also Rojek 1995). Furthermore, postmodern society has spawned the postmodern tourist, who has also been called the post-tourist (Feifer 1985).

 

The post-tourist lives in a world of hyper consumerism.  Never before in the history of humankind have more consumers had more choices and more opportunities than today.  Because of the many businesses that are vying for consumer attention in a crowded global marketplace, market differentiation is increasing.  There are more market segments today than there were yesterday, and there will be more tomorrow than there are today.  At the same time, style, branding, image and prestige remain important to the post-tourist.  Popular styles vary with different market segments, however, and because they have more choices, consumers are also more aware of prices and perceived value.  They are willing to spend money, but they want quality service, efficiency and predictability. 

 

The post-tourist is aware of the contrived and inauthentic nature of most attractions.  The post-tourist knows that there are multiple interpretations of the past and present, knows and accepts that culture today is highly commoditized, knows that tourism and travel is often highly exploitative of both the environment and destinations, and knows that most tourism is entertainment rather than education. The post-tourist has little patience for those who take them as fools on these accounts.

 

The results of these trends in the tourist market has been an increase in FIT (fully independent travelers) and self-directed travel.  It has lead to a rapid growth is special interest travel destinations and experiences. Culturally and environmentally sensitive travel has increased, though it remains a niche market. Short trips have become much more common, as people vacation as frequently as they can find the time. And the number of marketing channels for travel products has exploded.

 

To succeed in the new economy and with the new tourist, requires building a sense of trust and a sense and a strong identity (Fukuyama 1995; Goodman 2005).  Tourism businesses need to be able to address the needs of specific niche markets. They need to be able to converse and interact with their clients, starting before they ever become formal clients.  They need to have an identity that all stakeholders can clearly defined and are comfortable with, including the consumer, employees, and business owners.  This requires three things: transparency, consistency, and simplicity.

 

Transparency is necessary because consumers do not want to feel that that the business they are dealing with has something illegitimate to hide or is otherwise being deceptive.  They want to know as much information as possible in order to make an informed purchasing decision.  Furthermore, it is important to realize that information seeks to be free.  If there is a way that information can be known to the world, it will become known eventually, especially in this digital age when almost anyone can post a blog that is available for the world to read.

 

Consistency is important because consumers want to have a largely predictable experience.  The post-tourist seeks efficiency, predictability, and control (Ritzer and Liska 1997).  This is achieved through consistent messages and policies from the beginning to the end of the buying transaction.  Similarly, a simple and straightforward approach is more appreciated by consumers than is a complex and confusing one.  The best companies, with the strongest consumer loyalties, have achieved this by having a clearly defined image, and building the trust of their clientele through transparency, consistency and simplicity.

 

Long tail technology

 

In early October of this year (5-7 October 2005) the second annual Web 2.0 conference was held in San Francisco before a sold-out attendance (MediaLive 2005).  “Web 2.0” is a term used to refer to the emerging new wave of innovation on the Internet.  Some see it as a second high-tech wave, marking the recovery from the technology and Internet “bust” at the end of the 1990s (O’Reilly 2005).  Characteristics of Web 2.0 are:

 

(1)   data, information and technology are open source, rather than hidden under proprietary ownership;

(2)   new applications and web sites are making the global marketplace of ideas and products open to everyone, which is allowing new businesses can be established without the huge start up funds from venture capitalists that were common in the 1990s; and

(3)   these new applications and web sites are democratizing the tools of production, enabling greater diversity, allowing more customized streams of information and sales, and fostering the emergence of “a billion niche markets.” 

 

In essence, Web 2.0 is driving consumer demand down to the long tail.  However, one problem with the long tail is its very diversity.  It contains useful information and products, as well as illegal websites and deceptive sales practices; and it can be very difficult to navigate and find the information and products that one wants.  Businesses that use the long tail model must make this region easier and more comfortable for the average consumer.  This is another reason why trust and simplicity are very important.

 

Blogs

 

An example of long tail and web 2.0 technology are blogs and podcasts.  Blogs and podcasts are essentially free and available to anyone who has a computer with an Internet connection, though podcasting does require some additional technical skills.  The word “blog” comes from the term “Web log”, which was first used in 1997.  The shortened version of “blog” was introduced in 1999. A Web log or blog is a series of articles or short comments that are posted to a single web site over a period of time.  The most recent installment is usually at the top of the blog web site. 

 

It has recently been estimated that there over 100 million blogs have been started in the world as of October 2005 (The Blog Herald, 2005), though 40% to 50% may actually be spam blogs (known as splogs).  In addition, just because a blog was started does not mean it is currently active.  Tracking active blogs is much more difficult.  The geographic distribution of blogs is difficult to determine because so many bloggers use blog websites in the US.  For example, for Malaysia, approximately 20,000 blogs have been started on Malaysia-based sites, with probably many more using US-based websites.

Despite this problem, the largest blogging countries, based on blogs started, are:

 

  1. US (30-50 million blogs started, the lower number is probably US-based, many have been abandoned)
  2. South Korea (20 million)
  3. China (6 million)
  4. Japan (5.5 million)
  5. France (3.5 million)
  6. UK (2.5 million)

 

 

The topics covered in blogs are diverse.  Some are known as “identity blogs,” which are essentially diaries in which individuals expose their deepest secrets and feelings.  Other blogs focus on politics, financial advising, technology news, story telling, and “gossip” of many different types.  Most blogs are written by individuals, but there are also “collaborative blogs” that include more than one contributor.  Some are updated on a regular basis, while many were only in existence for a specific period of time after which no new updates have been added.

 

Travel blogs come in several different forms.  Most travel blogs are diaries of trips that individuals have made.  Once the trip is over, there are no new additions to the blog’s web site.  There are also many commercial travel blogs, which companies that sell travel use to advertise new products.  A few travel blogs focus on travel industry related news. Examples of travel related blogs include:

 

The Golden-Triangle Blog <http://golden-triangle.blogspot.com> – Describes a trip through Myamar, Thailand, Laos and China

 

Save Rainforest Blog <http://saverainforest.blogspot.com/> – Discusses environmental issues in Malaysia

 

TravelPod <http://www.travelpod.com/> –  A blog hosting website specifically for travel journal blogs.  The Malaysia section is at <http://www.travelpod.com/travel-blog-country/Malaysia/tpod.html>

 

Budget Travel Blog and Podcasts < http://www.budgettravelonline.com/bt-dyn/content/article/2005/07/01/AR2005070100731.html> - Links to RSS Feeds that can be subscribed to, such feeds will post the title of all new blog or podcast postings on an RSS feeder.  This website includes questions and answers about RSS Feeds.

 

American Federation of State, Municipal and Council Employees (Minnesota)

<http://www.afscme-mncouncil65.org/>This site appears to offer travel news and tips for union members?

 

One of the challenges is trying to find blogs that are relevant to one is interests.  In just the past couple of months, several of the major search engines have started offering blog search features, as well as “RSS readers” that allow one to subscribe to blogs of their choice.  Examples include:

 

      Technorati blog search <http://www.technorati.com/>

      Feedster blog search – <http://www.feedster.com/>

      Google Blog Search – <http://blogsearch.google.com/>

      A9.net - <http://a9.com/> – click on “Blog Search”

 

 

Podcasts

 

A podcast is basically an “audio blog.”  Internet-based audio has been around since the early 1990s when they were known as “Internet radio” or “Web radio.”  Some traditional news and talk radio programs have also been re-broadcast on the Internet for many years. While there is much overlap between “Web radio” and “podcasting,” the main difference is that a listener can subscribe to a podcast, using some type of “podcatching” software.   The podcatcher will periodically downloads each new audio file that is posted to a podcast website and place it on a computer or MP3 player to be listened to at a convenient time. 

 

The technology that enabled these audio subscription services was the 2.0 version of “RSS” (Really Simple Syndication).  RSS 2.0 was introduced in mid-2003, and was not widely available until Fall 2004, which was when the term “podcast” first came into common use (Wikipedia 2005b). The name “podcast” evolved from the Apple iPod digital music player (first released in October 2001; Microsoft prefers to use the term “blogcasting,” though that has not caught on, as yet.). The introduction of podcasting considerably expanded Web radio’s audience at the end of 2004 and early 2005.  Many of the more popular podcasts today were started at this time.

 

 

 

On July 1, 2005, Apple Computer added podcast subscription capabilities to its iTunes digitalmusic player and online music service.  The ability to subscribe to podcasts through the most popular music portal on the Internet resulted in a huge boost to the number of people downloading podcasts.  There are currently an estimated 10,000 to 15,000 podcasts in the world.  Like blogs, some are regularly maintained, while others have already been abandoned.

 

Podcasting is sometimes referred to as “narrowcasting,” which differentiates from broadcasting.  Narrowcasting emphasizes the importance of niche markets that are clearly defined and, potentially, highly devoted.  Some examples of travel related podcasts include:

 

·         Home Based Travel Agent - Podcast <http://hometravelagent.blogspot.com> and <http://hometravelagent.net/> In this podcast Barry Kantz, a former lawyer, discusses issues related to hist setting up and running a home based travel agency, and his resulting perceptions of the travel industry.

·         Road Less Traveled – Blog and Podcast <http://www.ahlsmith.com/ > - Scott Ahlsmith is the president of the Travel Institute and presents news and opinion from a travel industry perspective.

·         The Connected Travelers – Blog and Podcast <http://www.connectedtraveler.com/>  - Russel Johnson does environmentally-oriented inteviews and interesting soundscape tours of destinations that he has visited.

·         My Travel Review – Blog and Podcast <http://mytravelreviews.blogspot.com> - online description of travel to places visited by the show’s host, who travels around the world as part of his job.

·         iPod Traveller – Podcast < http://www.ipodtraveller.net/> Commercial tour operator that specializes in Europe and hosts regular podcasts about European travel news and reviews.

·         Geography for Travelers – <http://travelgeography.blogspot.com> World travel and tourism news, geographic descriptions of world regions, and social science perspectives on tourism.

 

 

In the US, it is estimated that one in 10 adults owns an MP3 player, and close to a third of them have tried downloading podcasts. These numbers are surely to rise over time, as the vast majority of people have never heard of podcasting.  Several American politicians, however, have their own regular podcasts, including the 2004 Democratic vice presidential candidate, John Edwards, and the Illinois Senator Barack Obama.  Most of the national news outlets in the US and UK now have both blogs and  podcasts.  Like blogs, finding one podcasts of potential interest can be a challenge.  There are many podcast directories

 

  • http://PodcastAlley.com/
  • http://Podcasts.Yahoo.com – also allows subscribing and listening to podcasts
  • http://Odeo.com – also allows subscribing and listening to podcasts
  • http://www.Podcastdirectory.com/map/    shows the location of podcasts on a Google Map

 

 

Blogging and podcast he are both part of the long tail and part of Web 2.0.  They represent a new information structure, a new way of making information available, and a new way of accessing information.  They are democratizing tools, in that they are available to almost anyone who has access to the Internet, and with minimal technical skills.  (Two other concepts that are just barely emerging, but are closely related to blogs and podcasts, are Vlogs, which is short for “video blogs,” and Moblogs, which refers to “mobile phone blogging.”)

 

Folksonomy and Tagging

 

The online Wikipedia (2005c) encyclopedia defines “folksonomy” as:

 

More colloquially, this refers to a group of people cooperating spontaneously to organize information into categories, typically using categories or tags on pages, or semantic links with types that evolve without much central control.

 

Folksonomy refers to classifications by all people (folk), and is distinguished from taxonomy, which is seen as classification by elite professionals.  Broadly defined, folksonomy is the collaboration of many people in an open and level (equal, democratic) working environment.  Narrowly defined, folksonomy is mostly discussed in relation to the practice of “tagging”.  Tagging is a small but integral part of the culture of podcast thing and blogging. 

 

Tagging is adding metadata definitions to digital files and web sites.  Traditionally, when someone creates a web site, they can include a large number of keywords so that Web search engines can find them.  Tagging allows viewers of a website to add their own key words to describe the material they are viewing.  Many podcast and blog search sites allow users to do this, again opening up the process of defining information to a finer level of user interaction.  This is an example of a Web based “open source” feature.

 

By allowing users to directly access and influence the definition of information has a leveling affect.  It reducing hierarchies and providing a more equal field of interaction among users.  It is also argued that open source tagging allows the emergence of new relationships and new patterns that would otherwise be overlooked by a hierarchical system.  Examples of tagging services can be found at Technorati.com, Odeo.com, Podcasts.Yahoo.com and Del.icio.us.  Del.icio.us also allows users to create their “favorite” lists that are shared with all other members of the website.

 

User reviews that are posted on websites are a form of tagging that has actually been in use for a decade or more.  EBay.com, for example, encourages everyone who buys on its website to rate and comment on the seller they bought from; and sellers are asked to rate and comment on buyers.  Rating of hotels, destinations, restaurants and attractions have also become increasingly common in travel and tourism web sites.  Some examples include:

 

·         Asia Hotels.com - Hotel Reviews - http://www.asiahotels.com/

·         IgoUgo.com Travel - Destination Reviews - http://www.igougo.com/

·         Trip Advisor.com - Hotel, Restaurant and Attraction Reviews - http://www.tripadvisor.com/ - was recently purchased by Expedia.com to provide reviews on that leading travel sales website

 

These reviews vary in their usefulness, and subsequent readers are able rate the usefulness of each review.  The reviews are similar to mini-blogs.  They are very subjective and, as such, there are some problems with reliability.  Reviewers often have limited experience upon which to base their comparisons. Older reviews may no longer be applicable if, for example, a hotel has undergone a major renovation.  Destinations with very few reviews may be biased simply due to the random chance of good or bad reviewers.

 

Open source and Wikis

 

Blogging, podcasting, and tagging are forms of open source technology.  The open source movement promotes the free distribution and sharing of software and data, as opposed to proprietary ownerships.  It is considered a grass roots movement with user generated content, such as blogs and podcasts, and software such as the Linux operating system and Open Office software products (that compete with Microsoft Office).  Blogs, podcasts and mini-reviews are sometimes considered forms of “citizen journalism,” as opposed to professional journalism.  The issue of who is considered a “journalist” has become increasingly problematic with the emergence of Web 2.0.

 

A wiki is essentially a Web site or Web page that can be changed by anyone who views it.  This is the ultimate in open source information.  Successful wikis require an editorial board of some kind that follows all changes to the web pages and has the authority to cancel or delete the changes. The largest web site of this kind is free online encyclopedia, Wikipedia.org.  Some examples of open source and wiki web sites include:

 

  • Skype.com and GizmoProject.com – Both offer free Internet based long-distance telephone service.

 

  • Flickr.com – A free web site where people post photographs they have taken that are free and available for downloading.

 

  • www.Writely.com – A free, online, collaborative writing website; allows approved users to see and write a document together; can use RSS feeds to update designated users everytime the documents is updated.

 

  • 37Signals.com - Online business collaboration tools, including: comprehensive project management; shared notes, calendars and to do lists; and collaborative writing (though less robust than Writely).  Basic versions of these features are free.

 

  • WikiTravel.org - Probably the most significant open source tourism and travel web site to date.  WikiTravel.org uses the same format as Wikipedia.org, but is so far not nearly as comprehensive in its content.

 

  • www.JotSpot.com – Online tools to creates wikis that can be used within a company (on an intranet) or on the more public Internet. (Free for up to 5 users and 20 web pages.)

 

One very recent example of an open source, collaborate effort the website, After-Katrina.org, which was setup in September 2005 to address the potential downturn in tourism to the Gulf Coast region of the US, following hurricanes Katrina (New Orleans) and Rita (Houston).  The website provided a form for tourism business owners to post the availability of their services (such as hotels and tours) on the website.  In addition, the site organizers planned to publish the information in a paperback book within one to two months after the website was set up.  The goal of the site is to dispel, as quickly as possible, any hesitation among potential visitors to the Gulf Coast.  The site notes that it is working to avoid the dramatic downturn in tourism throughout Southeast Asia following the December 2004 Indian Ocean tsunami.

 

 

Social software

 

The After-Katrin.org website is a form of social software.  Social software consists of online and other computer-based networking tools that allow people to communicate, interact, and collaborate.  These tools allow folksonomy to take place.  There are many different types of social software, and more are emerging all the time.  Some social software is closely integrated with face-to-face socializing and professional networking, such as in a social club.  The following are examples of the major types of social software currently in use:

 

  • Blogs and Podcasts
  • Collaborative software - Cooperative work environments / systems
  • Instant Messaging
  • Internet Relay Chat (chat rooms)
  • Internet forums (bulletin boards)
  • Folskonomy / Tagging
  • Social network services (centralized)
  • Social network search engines (decentralized)
  • Social guides (recommend real world places/services)
  • Social bookmarking (posting lists of favorites for others to see – furl, del.icio.us)
  • Social Citations (sharing article references - for academics)
  • Peer-to-peer social networks (file sharing – photos, blogs, instant messages,)
  • Virtual presence (meeting in virtual/online worlds)
  • Virtual worlds and Massively-Multiplayer Online Games (MMOGs)
  • Wikis / Collaborative real-time editing

 

 

Long Tail Business Models

 

In Web 2.0, technology tools are being made easier to use and are increasingly part of the every day life of consumers.  One example is the recent introduction of blogging tools within Microsoft Word, enabling one to type a blog using Word and with one click sending it to their blog web site.

 

It is unclear as yet what the best business models may be for using the new open source Web 2.0 technology.  However, from the many examples cited above, that is not stopping people from trying.  Some areas in which social software may be used to leverage long tail markets for business purposes include:

 

  • Listening to markets and consumers. By providing a public sounding board or forum for consumers of a company's products, a company can demonstrate its transparency and trustworthiness. Businesses need to be open to being trashed by consumers, in order to both learn from them and to build their trust.

 

  • Creating user communities. Social networks can be created through open source Web sites.  Such a Web site would include reasons for people to feel a part of the community of other users.  Users would need to feel that they are benefiting from belonging to the website.

 

  • Creating business alliances.  This is similar to creating a user community, but involves a community of businesses who are working together either formally or informally. This approach is also known as the “distributed business model.”

 

 

The distributed business model

 

Distributed businesses come in different forums. Their employees and sites of production may be geographically distributed, their customers may be geographically distributed (which is often the case with international tourism), and/or their products may be geographically distributed.  In many cases, the distributed elements of a business are separately owned; occasionally they are owned by one entity.

 

The distributed business model emphasizes the relationship between the distributed components of a business.  The model suggests that in a distributed business situation, loose relationships that work best are flexible, and long-term.  The core of a successful distributed business model is based on social networking among the distributed elements.  The key components of this social networking includes:

 

(1)   open and shared intellectual property,

(2)   the spreading of new knowledge through many small discussions, sometimes referred to as the “granular diffusion” of ideas,

(3)   scientific discipline that requires trial and error, and empirical experience to arrive at final decisions, and

(4)   a simple technological platform through which communication and collaboration takes place. 

 

The distributed business model essentially is a form of community building.  For such collaboration to be successful, requires a high degree of transparency, trust and frequent interaction and visibility. 

 

One possible examples of distributed businesses model is the travel booking website, Yahoo! FareChase <http://farechase.yahoo.com/>.  This website does not sell any travel bookings itself.  Instead it promises an unbiased and comprehensive listing of travel prices online, and then send the user to the other website to actually book the travel. This model is helping to build trust among users, some of whom are aware that most other travel booking sites have special relationships with some companies that bias their search displays.  It also gives them a even and open relationship with all of the airlines and travel agencies that actually book the travel.

 

One of the better examples of a distributed, online travel company is Virtual Malaysia <http://www.virtualmalaysia.com/p2g/>.  This commercial website sells travel in Malaysia, and provides travel industry news, all of which is available through RSS blog feeds <http://www.virtualmalaysia.com/vmrss.cfm> so people who visit the site can develop and ongoing relationship with Virtual Malaysia at all times.  Virtual Malaysia has a Travel Community section that allows registered visitors to post travel experiences (travel blogs) and photography, and has even created a separate photography community section.  They also offer membership cards to registered members that gives them buying discounts.  Having registered users allows Virtual Malaysia to keep track of the potential client markets that are making use of their web tools.  From their website, Virtual Malaysia describes itself as:

About Virtual Malaysia

VirtualMalaysia.Com is an e-tourism portal that provides acquaintance for discerning tourists hoping to capture a slice of Malaysia. Combining culture and technology, VirtualMalaysia.Com is the gateway to Malaysia's tourism and travel destinations….

Covering various sectors of tourism, VirtualMalaysia.Com signifies to educate the people into appreciating Eco-Tourism, Health Tourism, Edu-Tourism, Agro-Tourism and many more through the dissemination of content on Malaysia within the e-tourism portal. VirtualMalaysia.Com is a platform developed with the foundation to maximise technology for the tourism industry. Its incorporation focuses on five components which are content, tourism applications, tourism infrastructure, medium and method of delivery as well as promotions.

Maximising the technology into appreciating the nature and culture of Malaysia, VirtualMalaysia.com has been able to disseminate exciting and informative tourism contents.  (Virtual Malaysia 2005)

 

Conclusions

 

There are some downsides in the world of open source and distributed technologies.  Security is a challenge.  Identity theft and intellectual property theft can occur.  Identity bloggers sometimes face personal threats because of what they disclose about themselves in the public blogosphere.  For consumers, there can sometimes be a feeling of too much choice and too much dependence on technology.

 

A big challenge, that is still being worked on by many people, is how to monetize many elements of the social software realm.  While many examples have been presented above, they often tend to be peripheral to the day-to-day business activities of small entrepreneurs.  This may be a temporary state of affairs and new models will evolve.  Many, but maybe not all, of these software and online networking tools will eventually become commonplace.

 

In the Invisible Continent (2001), Kenichi Ohmae described a new continent that was cyber-based and borderless.  It was an easy continent to enter, open to all who were willing to give up their old ways of thinking.  It was an easy continent to move around in, as it transcended national and corporate borders and barriers.  Because it was so new, one could easily carve their own territory.  It was a continent that was not dominated by social groups or elites, but was instead highly individualistic.  And it was a continent in which the traditional profit models no longer applied.  Kenichi Ohmae was describing the promise of Internet, which crashed with the Internet bust that occurred about the same time as the Invisible Continent was published.  Many believe that as we enter Web 2.0, this new continent is not only emerging, but it is here.

 

 

“There are no secrets, only information you don't yet have...”

            Adam Curry, The Daily Source Code podcast (http://dailysourcecode.com/)

 

 

 

References

 

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