Big Data in the Online Economy

Everyone is talking about “Big Data” and the amount of interest in this area from investors and even the government is currently huge. Online/internet companies like Google, Amazon, Facebook have be

en the lead adoptors of this technology and are also in the forefront of innovations in this space. It would not be too far-fetched to claim that “Big Data” is one of the engines driving the online economy .

What benefits does this massive data processing capability provide?

For companies, one of the primary benefit is improved operational efficiencies in targetting the right customer base – whether it is Google and Facebook using your browsing/searching history and online activity to sell targeted ads, Amazon providing better recommendations for product purchases, or Target using your purchase history to send you coupons. In the semi-online world, “big data” is enabling new discoveries in the health sciences field and other scientific endeavors, helping intelligence agencies with better analyses, driving more operational efficiencies in supply chain management, Khan Academy is using it to better evaluate students, insurance companies are using massive data sets to predict risk better and quicker, hubway is using it to provide improve locations and capacity to best serve cyclists, sports teams (money ball!) are using it to evaluate players, and even presidential election are using it to win elections! There is also a push towards using big data for more data oriented decision within organizations with the hope that it will result in better business outcomes.

For customers, these advances in big data processing have made the online browsing experience more customized. Imagine LinkedIn without its “Jobs You may be interested In” feature or Amazon, YouTube, New York Times etc. without its recommendation engine. New frontiers are also being explored. A startup travel company in the Boston area is exploring the idea of using individual browsing and search histories and online social activity to provide you with travel destination recommendations which you most likely to enjoy. Big data analytics combined with “crowd sourced” intelligence is another approach leading to some very interesting products. A blog post earlier in this semester dealt with

The Downsides of Big Data
There is also a potential downside to this advance – the social and legal implications of governments and organizations posessing so much information about individuals is not completely clear yet. There is literally a “data grab” going on and there have been some obvious cases of invasion of privacy. A retail chain knowing when women are pregnant before their families do, or a group of students working on a class project being able to predict a person’s sexual preferences based on the person’s facebook activity are just two instances of this. If enterprises – with their primary objective of profit making – know so much about you, how will they use this information? In the best case scenario, people will get information really relevant to them. In the worst case scenario, it could lead to some kind of “online discrimination” based on your online activity or even something insidious as information control – companies or governments deciding what information people see and when. Whichever way it plays out, it is definitely going to be an interesting ride in the near future.

References and Articles:

http://gigaom.com/cloud/obama-administration-to-push-big-data-agenda/
http://www.mass.gov/governor/pressoffice/pressreleases/2012/2012530-governor-announces-big-data-initiative.html
http://www.heritagehealthprize.com/c/hhp
http://hubwaydatachallenge.org/
http://www.vjolt.net/vol6/issue2/v6i2-a11-Weiss.html
http://www.mckinseyquarterly.com/Competing_through_data_Three_experts_offer_their_game_plans_2868
http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=all&_r=0
http://online.wsj.com/article/SB10001424127887323353204578126671124151266.html


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