SAN FRANCISCO -- Insurance giant AIG is preparing to launch what some analysts say the Web desperately needs before trillions of dollars in business-to-business commerce can really start to flow: a way for businesses to determine whom they can trust online.
On Oct. 27, the worldwide insurer, with more than 250,000 employees, is scheduled to roll out its "e-commerce insurance suite," where businesses can scope out potential partners before committing to deals.
"Trust brokers" will verify the identity of the person offering that once-in-a-lifetime sale on the Web. Underwriters will plumb credit brokers and quality-assurance partners for background data. AIG plans to use the data to compile ratings of deal participants.
At first, AIG will only evaluate a portfolio of companies. But within a month or so, it could be used to evaluate one-on-one business transactions. Further details about the expanded service are to be announced Oct. 30.
The service is new even in the offline world, according to Forrester Research senior analyst Charles Rutstein, who said it has been made necessary by the shift in the way people do business online.
The virtual marketplace
Rutstein told a gathering of industry professionals attending the first-ever Forum for Trust in Online Trade that electronic marketplaces will be the online-trading norm by 2004.
There are about 1,500 such marketplaces already, at least one for nearly every industry. Some let buyers post messages about what they need online, then suppliers duel each other for the business. Others are structured with sellers posting their inventory and buyers placing bids in an auction.
Trust is the only roadblock, he said. Most deals will likely take place between people who've never met and will never meet again once money has changed hands.
"Something is missing from these: trust," Rutstein said. "We just don't know who is on the other end of the wire."
One-stop trust shops, such as AIGs, may help ease skittish companies' concerns, but they are just one answer, said Topher Neumann, of the Center for Trust Online.
"Given the level of uncertainty on the Web -- including corporate espionage, or even organized crime -- the issues are far too complex for a single answer," Neumann said.