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How Those Friendly Digital Assistants Will Make Money Off You

Digital assistants still make money for their creators

Though ostensibly free for users, digital assistants like Siri, Amazon's Alexa, and Google Assistant aren't public-service products. These digital helpers were created to make money. But how?

According to a recent story in MIT Technology Review, digital assistants are primarily valued for their potential in two revenue-producing arenas: making it even easier for users to buy products and services, thereby encouraging them to buy more; and collecting even more information about us that companies can leverage to sell advertising.

Just as Amazon's "one-click" purchase button boosted sales by reducing friction in the check-out process, tech companies are banking on digital assistants as the future of oh-so-easy-to-use retail interfaces. By making the buying process on a device like the Echo as simple as telling your phone to make an order, users will likely purchase more—whether it's getting groceries or an Uber ride.

The second money-maker is in the realm of user insight. Google Search grew its business by generating data on people's preferences and shopping habits. Similarly, digital assistants can unlock new information about what we might want to buy—information that could prove incredibly valuable for advertisers and marketers.

But that's not to say more revenue streams won't present themselves once using digital assistants becomes as normal and widespread as sending a text message.

"I wouldn’t be surprised if two or three years from now they find ways to monetize that we couldn’t even dream of," said Steven Tadelis, a professor at the University of California, Berkeley, Haas Business School, to MIT Technology Review.

Based on recent trends, its clear that most technology users are happy to trade personal information for convenience. But are digital assistants really the win-win that tech companies like us to believe?

How Alexa, Siri and Google Assistant Will Make Money Off You [MIT Technology Review]

All Home Tech Coverage [Curbed]