Can Carriers/Mobile Network Operators execute Long Tail / Web 2.0 applications?

Can Carriers/Mobile Network Operators execute Long Tail / Web 2.0 applications?

A good question .. raised at forumoxford. Here is my analysis .. I believe that most of what I am describing below can be done by a product such as Xtract today

What is the Long Tail?

The Long Tail is the opposite of the Pareto distribution(aka 80/20 rule) and is the preferred business model behind many of the recent Web successes – specifically Amazon.com.

Supply side motivations

On the supply side, we need low inventory and distribution costs. This means, unpopular products can be stocked. Netflix and Amazon are examples of this model.

Demand side motivations

Demand side motivations include search engines, recommendation engines, sampling tools etc allowing customers to search a wide range of products OR for products that they normally cannot find physically in a store due to lack of time. Again, Amazon.com and many others excel here.

Much has been said about why telcos cannot execute Long Tail applications. So, I am addressing the more challenging aspect of – How Telcos CAN execute Long tail applications.

Firstly, demand side is a software, recommender, and influencer problem. This can be addressed.

The supply side problem is more complex. The Telco needs to maintain a Long Tail inventory of some entity. The obvious answer is a Long Tail of content. A more interesting answer (for a Telco) is a Long tail of people.

A Long Tail of people is an interesting proposition for a Telco since it is accessible through voice and SMS. Remember that a social network can be built from transactions i.e. the underlying data. There are various research papers about how this can be done(for instance creating a social network from email data or from IM data). Therefore, implicit and explicit recommendations can be captured from voice data or SMS data and that can then be used to identify the long tail in an aggregated manner

Here is an example:

If many people call a specific Pizza place, then that Pizza place gets an implicit recommendation as ‘Good’. Note that individual records are not revealed ; rather aggregate records are used to create the rating. The initial rating can be displayed to the users and users can contribute. For instance – if users see this Pizza shop rated ‘Good’ and it turns out that they have been calling to complain – then users can update that information (this works same as Amazon ratings). But the difference is – this information is seeded by the Telco from voice records. Once it is seeded by the Telco, it can be enriched by the users. This is classic Web 2.0

So,

a) Supply side: The ‘Long tail content’ could be lots of shops and stores(by postcode)

b) Demand side: The social search and recommendation tools can be created

What is missing

a) Profiles!!! At the moment, very basic user information is known to the Telco

b) External feeds(for instance feeds of restaurants etc)

c) A social network built from transactions i.e. the underlying data

Like I said, all this is currently possible through products like Xtract. I think Telcos need to address this space by engaging more with the end users and building the profiles(that’s the missing link!).

Comments welcome