Industry Standard as prediction market

As I was finishing a prediction markets article for Release 2.0 so I can go to ETech with a clean conscience, I saw TechCrunch cover the Industry Standard’s rebirth as prediction market. The trouble with markets is that all the fun’s in playing them—you enjoy the financial pages a lot more when it’s your retirement fund you’re reading about the progress of.

Prediction markets in particular are hard to make a spectator sport, yet the magazine and media business is all about spectator sports. As Bradley Horowitz famously pointed out, 90% of people just want to read, 9% feel strongly enough to leave a comment, 1% actually create something for you. Industry Standard has adopted a three-pane approach to their homepage: industry news on the left, bets in the middle, miscellaneous crap on the right. None of it grabs the reader, not even the current state of the markets, which are share prices expressed as “community odds” (this is good, given hat making sense of markets is not your average consumer’s strong point). At the moment, they’re all hovering around 50%, which is hardly penetrating insight. “INTERNET CAN’T DECIDE ABOUT ANYTHING” would be the headline there, and is unlikely to rake in a Pulitzer.

TechCrunch’s Erik Schonfeld ended his piece with “When it is play money and anonymous usernames, as is the case here, my prediction is that it will be seen as nothing more than a gimmick.” I think he’s wrong, actually. Prediction markets can work fine with anonymity and play money—my article is about Google’s internal prediction market Prophit and it has both those attributes. However, the one thing that’ll kill a prediction market is being boring. Markets need liquidity, which comes from active traders reading, thinking, and trading accordingly. I don’t see much return visit appeal in the new Industry Standard at the moment, so in the prediction market of life, consider me shorting it.