Last month, I asked: Does open source make sense for prediction market software?
Today, I learn that Second Life goes GPL. The leftist Boing Boing guy writes: “This is HUGE.” —and lists like 100 related links (ouch!). Indeed, man. Here’s from the Secong Life blog:
A lot of the Second Life development work currently in progress is focused on building the Second Life Grid — a vision of a globally interconnected grid with clients and servers published and managed by different groups.
Would a prediction exchange have an interest in building such a “grid”. Would a TradeSports or BetFair Grid be useful? Hummm… There’s a strong centralization aspect in the business model of a prediction exchange. More than that, a successful real-money prediction exchange evolves towards a de facto monopoly —think BetFair (95% of the British betting exchange market, probably).
Could we have a private variation of a public prediction market on a private, corporate server? For instance, let’s say we would have a public prediction market on the business fate of Apple Computer (at TradeSports or BetFair) linked in some kind of way with an internal prediction market run on Apple Computer’s server (using an open-source software for prediction markets from the prediction exchange in question). No idea whether it would make sense. To render the problematic more complex, you could envision imaginary prediction markets… Would a prediction exchange grid come handy, then? No idea.
I’m probably thinking too much.
Addendum: The reason I file this in the “marketing” category is that I don’t buy the official rationale. I believe going GPL is a marketing tactic to expand, but maybe I dead wrong.
Linden is only open sourcing the SL client. The grid vision will only come about if people buy servers from Linden or reimplement or Linden open sources the server code (their FAQ says they’re “keeping an open mind”).
I see the move (which I do think is very good) as defensive (and partially marketing). If SL doesn’t become the standard for virtual worlds it is bound to become the Friendster of virtual worlds (instead of the MySpace).
Open source is definitely good for PMs. The software used by existing exchanges is utterly primitive. Since there are huge network effects, it pays to own the exchange, not the software.
“The software used by existing exchanges is utterly primitive.” I agree globally, but I disagree specifically for BetFair IT infrastructure, which is top notch.
“Since there are huge network effects, it pays to own the exchange, not the software.” Yeah. But BetFair would not trust open-source software. They develop everything internally.
I don’t know anything about the IT infrastructure of any exchange. I hope they’re all top notch in that regard. I meant primitive in terms of market features (e.g., no combinatorial markets).
If players were recently upset about unauthorised content replication, LL will be upset about unauthorised server replication – which will happen one day.
Open source prediction market software holds more financial and decision making promise than any vendors current approach/business model.