Third-Party Recommendation Systems Industry: Current Trends and Future Directions

Abstract

Over the past two decades, recommender systems have become ubiquitous -- we use recommendation technology whenever we shop at Amazon, watch movies on Netflix or browse any social networking website. We analyze the history, current trends, threats and the future potential of recommender technology. We start by studying the birth and evolution of the recommendation technology and describe the two major domains in which it has been commercially successful: online content and e-commerce. We focus on third-party recommendation companies, which contribute to most of the recommendation systems in the e-commerce domain. These third-party recommender providers seem to be thriving; however, they face threats from the commoditization of the technology, and from privacy concerns about the data they collect. For the future, we propose new domains and markets where recommender systems can be applied to. We also discuss the opportunities for recommendation in emerging markets of developing countries.

Keywords: recommendation system, third-party recommender, recommendation technology