Latent factor approach
The latent factor approach leverages matrix factorization techniques to arrive at recommendations. Recently these methods have proved themselves superior to item-based and user-based recommender systems. This was one of the winning solutions in the famous Netflix recommendation competition. Edwin Chen's blog at http://blog.echen.me/2011/10/24/winning-the-netflix-prize-a-summary/ is a good place to understand the various techniques used in the Netflix challenge.
Matrix factorization or matrix decomposition is the method of splitting a matrix into multiple matrices. The product of those matrices will produce the original matrix. For more on matrix decomposition, you can refer to https://en.wikipedia.org/wiki/Matrix_decomposition ...
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