“Trust”, the Underlying Element that Makes the Networked Information Economy Work- The Role of Social Media in the Evolution from Share Economy to Reputation Economy -

KO FUJII

PHP INSTITUTE, TOKYO

Facebook is Ending the Free Ride, March 19th

, 2014

Is this good or bad?

“Ultimately, what’s good for people on Facebook is good for the businesses that use Facebook to reach and engage them.”

Facebook for Business News, December 5th, 2013

Relevance

Traffic

Data

Ads

Relevance drives traffic that drives data.

Data drives both relevance and ads.

But platforms have little incentive to poison relevance (organic content) with ads - because if they do, users walk away.

Relevance Usefulness Authenticity

Credibility

Platforms need trust, whatever the approach.

Without trust, platforms lose traffic.

Without traffic, there is no data. Without data, there is no business.

ALGORITHMIC APPROACH

SOCIAL APPROACH

Trusted bloggers

Trusted curators

Trusted Platform

Money

TRUST is crucial for the ecosystem to function

2-sided Market of theNetworked Information Economy

Ads

Data

User experience

Platforms are disincentivized from breaking the trust with users.

Nevertheless, monitoring their activity to maintain the trust is important.

The web strives to be trusted.

But what about the “filter bubble”?

That’s a slightly different issue from ads.

The web can be free of ads’ influence but still have the filter bubble problem.

Relevance

Traffic

Data

Ads

The REAL filter bubble problem is this.

Not the ads.

It’s each user’ responsibility to reach outside the bubble.

Things you can do, tools you can use to break the bubble:

• Turn off cookies

• Erase web history

• Log out

• Go Incognito

• Tweak your preferences

• etc

Terresterial TV

Social Media

N/ACable TV/Paid email magazine

Which do you prefer?

Free

Non-personalized

Personalized

Paid

SOCIAL MEDIA LITERACY

You need to cultivate

But all in all, benefits of social media (seemingly) outweigh the costs

Find informationMeet new peopleConnectCollaborateShareDiscoverTake action

Targeted ads

Filter bubble

“Cognitive Surplus”

• Definition: the free time that people have on their hands to engage in collaborative activities, specially as applies to web 2.0. (www.urbandictionary.com)

“The ability of the worlds’ population to volunteer, contribute and collaborate on large, global projects. “- Clay Shirky

Digital technology + human generosity + more free time = collective creation to improve the world for civic purposes.

We just talked about transaction of information in web2.0.

Now let’s talk about transaction of

things and services

Central production-distribution model

In an networked economy, assets can be shared, co-owned, and reused.

Share Economy

Definition - ”sharing economy” Wikipedia

“a socio-economic system built around the sharing of human and physical assets. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organizations. These systems take a variety of forms, often leveraging information technology to empower individuals, corporations, non-profits and government with information that enables distribution, sharing and reuse of excess capacity in goods and services.”

ECONOMIC IMPACT

“The Clothesline Paradox”

“If you put your clothes in the dryer, the energy you use is measured and counted, but if you hang them on the clothesline to be dried by the sun, the energy saved disappears from our accounting”.

Reputation economy is bigger than what appears on your accounting book.

Category -”sharing economy” Wikipedia

• Bartering

• Bike sharing

• Book swapping

• Carpool/Ride sharing

• Car sharing

• Clothes swapping

• Club theory

• Peer-to-peer renting

• Product service system

• Seed swap

• Share taxi

• Time banks

• LETS

• Virtual currency

• Collaborative workspace

• Co-housing

• Coworking

• Crowd funding

• Garden sharing

• Home exchange

• Fractional ownership

• Peer-to-peer lending

Common premise-”sharing economy” Wikipedia

•Unused value is wasted value

•Access not ownership

•Transparent and open data

•Trust

Trust is important for the share economy because safety of transaction, experience, and asset rely on trust.

But how do you assess/measure trust?

Measuring trust

You are more likely to trust someone if:

• You have mutual friends

• You share something in common – alma mater, hobby etc

• You know more about each other’s past and present activities

These information are now available on social media - if willing to share.

“ TrustCloud provides a tool to build and maintain portable Trust between strangers and sharing sites, simplifying and improving the Sharing Economy experience and shaping its evolution.

The notion of connecting trustworthy strangers is an untapped market. Social, mobile and location technologies are coming together to make efficiency and trust. Technology creates the social glue for trust to form between strangers.Rachel Botsman, Wired 2011”

https://trustcloud.com/the-sharing-economy

Reputation is quickly becoming an asset to leverage and maintain.

The rise of the

REPUTATION ECONOMY

Imagine a world where banks take into account your online reputation alongside traditional credit ratings to determine your loan; where headhunters hire you based on the expertise you've demonstrated on online forums such as Quora; where your status from renting a house through Airbnb helps you become a trusted car renter on WhipCar; where your feedback on eBay can be used to get a head-start selling on Etsy; where traditional business cards are replaced by profiles of your digital trustworthiness, updated in real-time. Where reputation data becomes the window into how we behave, what motivates us, how our peers view us and ultimately whether we can or can't be trusted.

WELCOME TO THE REPUTATION ECONOMY

September 2012 Issue

From Credit to Credibility

“The biggest shift is from credit to credibility.  It's not just about quantitative scores. It's about the qualitative. Is this a good person to do business with?” …

“Our data sources have to be broader than trade activities. We are working with Twitter, Facebook, foursquare and LinkedIn to get access to all kinds of unique information. What are people tweeting about a business? Are there positive reviews on Yelp? That gives us a crowdsourced angle to credibility.”

Jeff Stibel, CEO,Dun & Bradstreet Credibility Corp.November 19, 2012 interview - creditcard.com

Are you ready for the REPUTATION ECONOMY?

THANK YOU.