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E-Business Secrets
Brian Livingston
How 'Reputation Managers' Make Web Markets Possible

A study by a researcher at the Massachusetts Institute of Technology (MIT) reveals that the importance of the "reputation managers" used by and numerous other e-commerce sites and proposes a novel method to ensure that a few users can't "stuff the ballot box" to distort the ratings.

Researcher Chrysanthos Dellarocas, of MIT's Sloan Institute of Management, says that trust is the most important commodity for an e-commerce marketplace because, unlike the physical world, buyers and sellers can't easily meet to evaluate each other. Giving buyers and sellers the confidence that each party will honor its end of a transaction, therefore, is critical to the success of Internet sites where goods and services are sold.

Dellarocas has developed three methods to prevent conspirators -- no matter their number -- from slanting an overall score more than 0.5 points (where reputations are rated on a scale of 1 through 10). The following are these three methods, which may be used in varying combinations:

1. Controlled Anonymity. In situations where the verified identities of buyers and sellers are known to an e-business, but not to each other, a degree of anonymity ensures that buyers can give honest ratings without fear of retaliation from sellers, and vice versa.

2. Median Filtering. Instead of relying upon the ordinary average of all ratings, an e-business can use a "median-aware" formula that calculates a valid score while filtering out responses that are atypical.

3. Frequency Filtering. By determining the rate at which ordinary users submit ratings, the scores from people who submit very frequently (and who may be trying to skew the results) can be excluded, preserving the integrity of the reputation system.

The 29-page paper, which is free in PDF form, can be useful to any e-commerce site that has or is considering any form of feedback from satisfied and dissatisfied market participants. The paper contains mathematical formulas, but lay readers can easily skip over those and get value from the prose descriptions of the three recommended methods and the report's concluding summary.

"Building Trust Online: The Design of Reliable Reputation Reporting Mechanisms for Online Trading Communities," by Chrysanthos Dellarocas (1MB PDF)

E-Business Book Review: A Guide That Covers It All

A new book covers many of the technologies needed for sophisticated Web sites without trying to make you an expert in every one. Instead, "XML, HTML, XHTML Magic" by Molly Holzschlag provides step-by-step projects that anyone with a basic understanding of HTML can complete. writes, "Impressively, the book covers XML, HTML, XHMTL [eXtensible HTML], DTD [Document Type Definition], CSS [Cascading Style Sheets], SSI, PHP, JavaScript, Apache, and WAP [Wireless Application Protocol]. A book that included all of this would probably have a thousand pages and make it too difficult to apply to Web design projects. This sleek 200+ page book tells you what you need to know to work through the project and take your skills to the next level."

"XML, HTML, XHTML Magic," by Molly Holzschlag

(New Riders Publishing)

E-Business Technology Review: First Color Wrist Camera

Don't you hate it when you see something on the street that you'd really love to depict on your Web site, but you're not carrying around your bulky digital camera?

Now you can be prepared to take those shots 100 percent of the time with the Casio WQV3, the first full-color digital camera, which is entirely contained within a normal-looking wristwatch.

Casio brought out its older Wrist Camera back in September 2000, but since it captured images only in black and white it had limited suitability for use on Web sites. The new WQV3, which has a street price of about $236, stores as many as 80 images in full color (16 million shades).

The images are 176 by 144 pixels, which is tiny by digital camera standards. But it's an ideal size that allows you to fit, say, nine such images inside a VGA screen in a Tic-Tac-Toe pattern.

If you don't need instant photos for your Web site, you can always take pictures of people you meet, then enter their names and phone numbers into the WQV3's database. Never forget a name again.


Livingston's Top 10 News Picks O' The Week

1. Internet tax ban expires; how will this affect you?

2. is quietly relaunched by buyer KB Toys

3. Holiday e-tailing to grow 30 percent to 40 percent over 2000

4. Online clothes shopping will lead holiday growth

5. First use of data-hiding "in the wild" is reported

6. How hackers pushed "Flooz" currency into bankruptcy

7. Site charges pennies for TV show, bills cell phones

8. Views of online ad-blocking software: Is it legal?

9. Web tips: An introduction to the uses of XHTML

10. Nap time: Disney cartoon hits evil of music-sharing

E-Business Secrets: Our mission is to bring you such useful and thought-provoking information about the Web that you actually look forward to reading your e-mail.

About The Author: E-Business Secrets is written by "InfoWorld" Contributing Editor Brian Livingston. Research director is Ben Livingston (no relation). Brian has published 10 books, including:

"Windows Me Secrets"

"Windows 2000 Secrets"

Win a book free if you're the first to send a tip Brian prints:

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