An Exploratory Study of the Emerging Role of Electronic Intermediaries

Joseph P. Bailey and Yannis Bakos
International Journal of Electronic Commerce
Volume 1, Number 3, Spring 1997, pp. 7-20.

Abstract: It is often argued that as electronic markets lower the cost of market transactions, traditional roles for intermediaries will be eliminated, leading to “disintermediation.” We discuss the findings of an exploratory study of intermediaries in electronic markets that suggest that markets do not necessarily become disintermediated as they become facilitated by information technology. We explore thirteen case studies of firms participating in electronic commerce and find evidence of certain new emerging roles for electronic intermediaries, including aggregating, matching suppliers and customers, providing trust, and providing interorganizational market information. Two specific examples are discussed in greater detail to illustrate an unsuccessful strategy for electronic intermediation (BargainFinder) as well as a successful one (Firefly).

Key Words and Phrases: electronic data interchange, electronic markets, intermediaries, Internet commerce.