Identity: A Huge Business Opportunity

Companies across our portfolio are spending a lot of resources on suppressing various types of undesirable behavior ranging from comment spam to outright financial fraud.  Much of this could be avoided through a probabilistic identity system.  I have written about this idea before, but nobody has cracked the nut on it and the problem has only grown since. The solution to identity on the Internet is not to try for certainty and systems aiming for certainty will fail because they need to impose too many restrictions on users (would be the same effect that DRM has had on the user experience created by publishers and the music industry).  

Instead, what is needed is a service that takes many signals as inputs, including Facebook, Twitter, Disqus, general web presence, and so on.  That may be enough for a new social media service to establish whether someone is a real user or just a rapidly created fake account.  For services such as banking that need higher degrees of certainty, it should be possible given these inputs to dynamically generate a few questions for the user to answer.  Questions might be like “which of these three pictures did you publish to Twitter?” or “which of these three bands do you like best?”

The best product in this direction seems to be Lexis Nexis InstantID which draws mostly on public records about where people have lived.  Adding that and additional offline data into a web service could be used to further improve it’s accuracy.  If this kind of service were reasonably priced, I am convinced that it would find massive adoption.