User-based collaborative filtering systems have been very successful in past, but their widespread use has revealed some real challenges such as:
The weakness of nearest neighbor algorithm for large, sparse databases led us to explore alternative recommender system algorithms. Our first approach attempted to bridge the sparsity by incorporating semi-intelligent filtering agents into the system [23,11]. These agents evaluated and rated each item using syntactic features. By providing a dense ratings set, they helped alleviate coverage and improved quality. The filtering agent solution, however, did not address the fundamental problem of poor relationships among like-minded but sparse-rating users. To explore that we took an algorithmic approach and used Latent Semantic Indexing (LSI) to capture the similarity between users and items in a reduced dimensional space [24,25]. In this paper we look into another technique, the model-based approach, in addressing these challenges, especially the scalability challenge. The main idea here is to analyze the user-item representation matrix to identify relations between different items and then to use these relations to compute the prediction score for a given user-item pair. The intuition behind this approach is that a user would be interested in purchasing items that are similar to the items the user liked earlier and would tend to avoid items that are similar to the items the user didn't like earlier. These techniques don't require to identify the neighborhood of similar users when a recommendation is requested, as a result they tend to produce much faster recommendations. A number of different schemes have been proposed to compute the association between items ranging from probabilistic approach  to more traditional item-item correlations [15,13]. We present a detailed analysis of our approach in the next section.