The Now Economy

Some folks at Google have set up an internal prediction market, and they seem pretty pleased with the results. There’s also a lively discussion at slashdot.

The names on the project that I recognize are Hal Varian, an economist at Berkeley, who has written about prediction markets before, and Patri Friedman, son and grandson of David and Milton respectively, and a regular on the Catallarchy blog, who’s currently working for Google.

They didn’t say anything about the form of the market, or what software they’re using (homebrew, or borrowed from one of the existing providers.) Patri says that his part of the project was analysing the data in order to show that it has some predictive utility, and (gasp!) the predictive power gets better as the deadline approaches.

I will have to talk to some of the people I know at Google (everyone in Silicon Valley knows a few people at Google, I’m not claiming to have any special connections) and find out what they’re doing, and how it’s working for them.

There are no hints that they are considering setting up public markets. There are plenty of reasons for large companies to run internal markets, and software companies in particular can benefit from better predictability of their software development efforts, and better tools for aggregating opinions about what is likely to succeed in the marketplace.

Kevin Compton, star VC at Kleiner, Perkins, has invested personally in a venture more closely related to the NHL than EAI… Protrade appears to be a market that tracks prices set by the house, based on detailed models of “player performance” — the game (of skill) is to track that synthetic index, it seems.

This is well short of gambling, I’d wager

New Net venture: Sports stock mart / Online startup to trade ’shares’ in pro athletes

New Net venture: Sports stock mart
Online startup to trade ’shares’ in pro athletes Benny Evangelista, Chronicle Staff Writer
Monday, September 19, 2005

Sports fans may soon be wondering whether their “shares” in 49ers quarterback Tim Rattay are falling or whether they should add Raiders wide receiver Randy Moss to their portfolio.

That’s because a San Mateo startup called Protrade Inc., which has key backing from well-known sports figures such as Brent Jones, Jeff Moorad, Bill Walsh and Jerry West, plans to launch an online venture that assigns a value to pro athletes as though they were publicly traded companies.”It’s much more similar to a sports stock market than a fantasy sports league,” said Protrade co-founder Mike Kerns. The other co-founder is Jeff Ma, onetime member of the infamous team of blackjack players from the Massachusetts Institute of Technology, which devised ways to beat Las Vegas casinos.

Kerns and Ma plan to open the firm’s Web site, at www.protrade.com, to the public today.

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