Recommendation Nation

May 6, 2008 | Source: Technology Review

On the Internet, the focus of digital personalization has shifted from what people are interested in now to what they might be interested in next, using automated suggestion algorithms.

Click-throughs are the currency of the recommendation nation. The more choices you make (or decline to make), the more finely tuned the recommendations become. The more your peers interact with Amazon, the better Amazon’s engines can infer which recommendations will make the most sense for you and the most dollars for them.

The result is that recommendations can become breathtakingly profitable examples of what economists call “network effects,” where a network’s value is proportional to the number of its participants.