Gaining the trust of your customers is important in business, particularly in the on-line world, where choices continue to proliferate and the ability to switch between them grows ever easier. Yet received wisdom has it that any players specializing in customer information will serve vendors, not customers. We believe that two key developments challenge this idea.

First, in a networked economy, the ability of customers to capture information about their own behavior and preferences implies a corresponding ability to withhold this information from vendors that seek it. Second, the sheer accessibility of such information has raised a host of concerns about privacy. These shifts in the nature of economic activity will force companies to negotiate with customers to gain access to information about them.¹ As a result, new entrants—"infomediaries"—will specialize in collecting customer information in a new information-intensive economy. We define an infomediary as a business whose sole or main source of revenue derives from capturing consumer information and developing detailed profiles of individual customers for use by selected third-party vendors.

Infomediaries will handle negotiations and payments and add value by processing customer information. After first emerging in networked sectors of the economy, they will eventually expand into...