• Choose a category
• All
• Classic-Fiction

By Root 864 0

companies—Lulu.com, Blurb.com—that enable authors to have their books designed, printed, sold, and distributed and to keep a much higher proportion of the sale price—up to 80 percent, versus the roughly 15 percent of the hardcover price authors receive from mainstream publishers (minus the agent’s 15 percent). Authors can sell their books directly to readers via Amazon as well. But, of course, mainstream publishers will argue that because they have relationships with bookstores for sales and with media outlets for promotion, they are able to sell many times more books for a higher profit than an author can when selling directly. They’d be right—for now. This is why even I, cyberguy, chose to have this book published the old-fashioned way: Because the book and my ideas will be distributed and promoted broadly and I will likely make more money. My publisher is adding value. In the next section of the book, we examine how book publishers need to update their business and their books for the Google age.

For all middlemen, the clock is ticking and the question of value is looming. Every time Google makes a direct connection, a middleman’s value is diminished. Are you a middleman? If the web is hurting rather than helping your business, the answer is probably yes. If you make the marketplace more efficient, if you solve problems of abundance and confusion and add value, good. But even if you do, anyone can use the internet to undercut you—to craigslist you. If you make your living telling people what they can’t do because you control resources or relationships, if you work in a closed marketplace where information and choice are controlled and value is obscured, then your days are numbered. I’m talking to you, car salesmen, advertising agencies, government bureaucrats, insurance-office benefit-deniers, head hunters, travel agents (oh, sorry, they’re already nearly extinct), and real-estate agents.

The internet abhors inefficiency, eliminating it whenever Google, Amazon, eBay, craigslist, et al connect buyer to seller, demand to fulfillment, question to answer, SWF to SWM. Economist Umair Haque, blogging for the Harvard Business Review, sees a shift from an economy built on inefficient marketplaces, where ownership and control are centralized, to an economy built on efficiency, where information is open and the power resides nearer the edges. “Competitive advantage is fundamentally about making markets work less efficiently,” he said. “One catastrophically effective way to do that is to hide and obscure information—to gain bargaining power relative to the guy on the other side of the table.” The new way to succeed is to do the opposite: “Release information bottlenecks and make things more liquid.” In other words, stop trying to make money by interfering in transactions.

Consider my least favorite inefficient marketplace: real estate. I hate paying agents 6 percent commission for doing so little. They, in turn, hate it when I talk about them on my blog. What we think of real-estate agents around the world is an open secret. A 2008 survey by the British Journalism Review found that real-estate agents are the least-trusted professionals, worse even than tabloid reporters. Only 10 percent of Britons trust them.

But real-estate agents have nothing to fear from me—or, they think, the internet—because they control one of the last dark pools of restricted information left in business: the multiple-listing service (MLS) database of properties for sale. If your house isn’t listed there, buyers won’t see it and other agents won’t show and sell it. But only real-estate agents can list homes in the MLS. I call that monopolistic restraint of trade. Real-estate agents call it service. The U.S. Justice Department called it antitrust, and in 2008 it reached a settlement with the National Association of Realtors to open up the multiple-listing service somewhat to discount brokers. It was a small victory against the middleman.

Agents say they bring you pricing expertise. But in the U.S., Zillow. com will give you an automated estimate of your