Getting Rich From Others Was Never Easier

http://www.bloomberg.com/news/2011-10-03/getting-rich-from-others-was-never-easier-commentary-by-william-d-cohan.html

by secretasiandan • 15 years ago

20 10 15 years ago

I think most people don't view social networks as extracting value from their user's the way they view financial traders doing so.

Some people will say that quant trading adds some value, but that the amounts the traders reap is too much.

I believe the value quant trading provides to its customers in proportion to the value it extracts is on par with social networking. A lot of the people who make arguments that quant trading provides no value have no idea how to value the liquidity that quant traders provide in the same way they can value what social networking provides. To appreciate what (most) quant trading firms provide, you have to have transacted frequently and significantly in the market.

garethsprice• 15 years ago

Complaining that Twitter/Facebook are profiting from providing a platform for people's conversations is like complaining that a bar owner provides nothing but an empty room and some booze while the patrons provide all the real value - is the publican getting rich off the "free work" of his customers?

For user-generated broadcast content (HuffPo), he's got a point though.

secretasiandan2• 15 years ago

Both provide platforms for others to post content. Both generate revenue due to the content.

You haven't specified how they differ. What property of one is unlike the other?

patrickk• 15 years ago

Content (articles/blog posts) copied on a content aggregator is quite possibly of interest to a great many people. The original author deserves full credit and ownership of that content (unless they work for some company, then their employer owns the content).

Content on Facebook is more likely to be conversations between friends or information about a person (their employer, music tastes etc). This information is likely to only be of immediate interest to the individual who posted it, and to their friends.

So copying information from an article/blog post and passing it off as your own is like a newspaper ripping off another newspaper and doing no reporting of their own (or buying content for Reuters ;-) ). Repeating content from Facebook is like repeating something you overheard in a casual conversation between friends (unlikely to be of interest unless you know the people in question).

Not sure what analogy would apply to Twitter.

Hyena2• 15 years ago

My gut feeling is that, privacy issues aside, the people who are really getting fleeced are advertisers.

perfunctory• 15 years ago

I wonder how long it will take them (advertisers) to figure it out.

arihelgason• 15 years ago

Because their advertising overpriced? Surely it's easy enough for advertisers to monitor results. Curious why there's this perception.

Hyena2• 15 years ago

Cognitive bias? Advertising is impersonal but advertising firms are very personal? Why do people ever make bad decisions in the face of data?

I think there's a core of people convinced that advertising really works well or convinced that "it would if only". I'm skeptical.

TomOfTTB• 15 years ago

The problem with this article is the author draws a dubious line between three different things.

Facebook and Twitter provide a service for no money but you end up paying them in content which they trade to advertisers (who then give them money). Making social networking nothing more than a traditional transaction with a middleman.

The Huffington Post doesn't pay its authors or provide a service but they do offer a chance at fame through a famous distribution model. Making it a lot like gambling where most people pay more than the experience is worth (by generating content and never getting famous) while a lucky few extract a huge portion of the value (by becoming famous). But The HP is just like the Casino extracting a piece of the action through advertising.

What Business Insider does is just kind of slimy. But it mostly quotes famous people who don't seem to care if Blodget takes money from them.

So we're talking about three very different phenomenons

toadkick• 15 years ago

It'd be nice if the author of the story would point out how Instapaper is different than Business Insider, in that the content it "harvests" is content that the user must first see by going to the actual website where the content exists, and save the page for later viewing, meaning that the original site still gets credit for at least 1 page view. Instapaper also does not pretend or try to trick the reader into thinking that the content belongs to or is generated by Instapaper staff. Henry Blodget knows that his actions are dubious, and is grasping at straws with his comparison.

Getting Rich From Others Was Never Easier

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