David Perry (of Consensus Point) has just clinched a deal.
I have told you many times that David Perry is a very gifted salesperson and business executive. Under-rate him at your own risk.
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UPDATE: I’-m told it’-s a nano deal. 
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Emile’-s made up a phrase that means nothing (except in his fertile imagination), “-a proprietary prediction market variant“- —-sounds like a red herring to me.
Unlike Consensus Point, Inkling Markets and Xpree, NewsFutures is the only prediction market software vendor not to have adopted Robin Hanson’-s MSR —-a simplified trading technology now in use in most enterprise prediction markets.
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Using Prediction Markets to Track Information Flows: Evidence from Google – (PDF file – PDF file) – by Bo Cowgill, Justin Wolfers, and Eric Zitwewitz – 2008-01-06
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Bo Cowgill:
[…-] Trade-by-trade data can reveal characteristics of specific working groups: What they know, how they feel, how they process and share information and how all of that changes over time. I didn’-t try to put any of this in the paper because the conclusions would be sensitive, and I thought this application was pretty obvious to anybody who understood our methodology. […-]
Bo Cowgill:
I’-ve also heard that other companies would find it impossible to analyze the interaction between their market and the organization. Why? Lack of data. […-]
Bo Cowgill:
Some more remarks about applications that combine prediction markets and organizational data (org charts, social networks, seating locations). The obstacle to these applications is not a lack of data. Jed mentions privacy concerns —- and if he thinks this is a big obstacle then I’-d be interested in discussing his thoughts.
A bigger problem is that that current prediction market vendors and consultants cannot support these applications. At heart, these vendors are software engineers and salespeople at heart, not statisticians or data miners. They want to write one system that can support lots of clients. At conferences, one hears PM vendors complain about having to do “-customization”- work for clients.
This approach would not work for the applications I describe for two reasons:
- The inputs for different clients won’-t be the same. Each client’-s organizational data will likely take a different structure. This makes it difficult for prediction market vendors to architect a single system that can served many clients (yet another challenge with integrating markets with other corporate IT services).
- The outputs for different clients won’-t be the same. The business relevance and statistical power of each analysis will differ with each client’-s data.
Prediction market vendors may also need to familiarize themselves with the statistical learning methods necessary to fully utilize these rich datasets. So what’-s the solution? First, move to a software-and-consulting model. By ‘-consulting,’- I don’-t mean ‘-consulting on how to implement the market.’- I’-m talking about helping the client solve its problem using a variety of data, including prediction market data.
Second, the vendors also need to pitch prediction markets as more than a forecasting tool. People in the business world commonly identify as data junkies —- probably more so than they identify with the ‘-wisdom of crowds’- ethos. It is unclear how much companies really care about accurate forecasting anyway.
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On a related note, there is something that only the prediction market software vendors could do, at this time, for those who are in capacity to do so: setting up inter-industry prediction markets —-or at least, handing over (with everybody’-s agreement) anonymized prediction market data on industry topics to anyone else in the industry who is a client of that PM firm. I don’-t know about NewsFutures or Inkling Markets, but if you look at Consensus Point’-s list of clients, you’-ll see that David Perry’-s firm is strong in the (consumer) electronic industry —-Motorola, Qualcomm, Siemens, Nokia. Use your imagination, or ask David Perry directly, for more…- (I can’-t talk- otherwise, next thing, I’-m a dead blogger.)…-
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Previous blog posts by Chris F. Masse:
I’-m free to talk, now.
The Industry Standard is powered by Consensus Point.
The New York Times don’-t print that, but they print that MIT CCI’-s Thomas Malone (branded in the piece as a prediction market evangelizer) has been advising The Industry Standard.
I spotted dozens of news articles on the Industry Standard’-s re-launching. Their spin doctor did a good job.
By the way, speaking of media-managed prediction exchanges, the CNN prediction exchange has some prediction markets with each a total of transactions in the magnitude of 50,000. That’-s awesome. Congrats to Inkling Markets. Mike Giberson (who has become an expert in MSR trading) is one of the traders, probably…-