Not to put too much faith into the unscientific Gartner hype cycle, but it does feel like a time of backlash responding to some early over optimism. As cooler heads prevail, and the technology speaks for itself, I think we’ll start to see some solid success stories.

The industry failed because its aficionados (Robin Hanson, Justin Wolfers and James Surowiecki) oversold the benefits of the prediction markets. Overselling didn’t work in the past, and won’t work in the future. It’s time for Dave to wake up.

I like an analogy of Playstation versus Wii. Just like Wii opened up video gaming to a mass audience including women, I think there’s room for simpler/friendlier sites like smarkets that can open up gambling to a much wider audience than sites like betfair that seem to cater mostly to men familiar with gambling jargon.

4 more important factors:

1. Robin Hanson, James Surowiecki and Justin Wolfers have exaggerated the usefulness of the prediction markets, hence putting the bar too high.
2. Robin Hanson, James Surowiecki and Justin Wolfers were clearly the wrong leaders. They pushed the enterprise prediction markets, which proved to be a mirage. John Delaney was also the wrong leader to follow. TradeSports-InTrade was a big operator; InTrade is a niche player. All the leaders failed. All of them. Including David Pennock (who has the backing of an Internet giant). On top of that, the prediction market people let the San Francisco clown pollute our turf; he has now decamped for a greener turf, of course. We need better leaders. We need leaders with a better compass.
3. Real-money prediction markets are still illegal in most countries (including in David Pennock’s one).
4. North-American aficionados of the prediction markets (and that includes Paul Hewitt) have always lambasted UK-based BetFair, for silly reasons (just look up Pennock’s prose, above, for one instance), instead of making it the hero of our field. On the other side of the Atlantic, the BetFair management has never joined and supported the prediction market community.

The result is the Waterloo that David Pennock describes in his post, and no solution is proposed (other than the tired mantra, “yes, we can”). [Not a slam to research scientist Dave, just a parting way to get the debate going. ]

Accountability
Meritocracy
A marketplace to reward information release
Real-time updates
Accuracy
Increasing ease of use, as the technology matures and diffuses
Self funding

From: Emile Servan-Schreiber, NewsFutures

To: all friends of prediction markets:

A number of us have been talking recently and we are in agreement that the existing forums for prediction market enthusiasts and watchers, owned and controlled by single individuals, are lacking. We think the industry deserves its own independent, open, community-owned discussion forum. As such, we have created a new Google Group dedicated to fostering and furthering high-quality open debate and communication about prediction markets: the R&D, the theory, the practice, the industry developments and upcoming events.

We strive for an open discussion and we commit to run the group with transparency, openness, objectivity, and independence. But we also believe some ground rules are needed to maintain a high quality of conversation that minimizes advertising, second-hand PR, or anyone monopolizing the conversation. We think some vigilance along those lines will make a positive difference in the communication and discussion. We hope you do too!

To join our new discussion group, click here:
http://groups.google.com/group/prediction-markets-open-discussion

Sincerely,

Oliver Bernhard Pedersen
Jed Christiansen
Bo Cowgill
Forrest Nelson
David Pennock
Emile Servan-Schreiber
Adam Siegel
Justin Wolfers

http://www.pmindustry.org/

1. Facebook

2. Wikipedia

3. Betfair

4. NewEgg

5. Craigslist

6. Mozilla

7. Yandex

8. Webkinz (aka Ganz)

9. GoDaddy

10. Demand Media

Hi, thanks to “Google” [the description line concocted by the website owners and which Google displays in its search results] or better, thanks to their own PR guys, we can ranks the PM vendors:

1/ Leaders
InTrade: THE Leading Prediction Market
Consensus Point: the leading provider of business prediction market…
NewsFuture: Leader in Prediction Market Solutions for Entreprise
Crowdcast: the leading provider of prediction market solutions for collective forecasting
HSX: the world’s leading entertainment stock market

2/ Pack members
Inkling: Business Intelligence Using Prediction Markets
Nosco: state of the art Idea Mangement software based on prediction markets
Pro:kons: The software solution for Prediction Markets and consensus building
Qmarkets: Qmarkets provides Enterprise prediction markets & idea management software, for innovation, sales forecast & decision support
Spigit: Spigit is innovation software designed to connect and analyze your social networks, communities, partners and customers
Exago Markets: Solutions Exago Markets focus on three major areas: support to the process of management ideas, testing concepts within and outside the organization and forecast of future events
TradeSmarter: Binary Options Trading platform of real time trading on forex options, stocks and commodities. Binary Options is the simplest way to take a position on economic events, letting you speculate on your financial views.

Nice to see so many (world) leaders. Thanks Jennifer for making us laugh.

Regards
Cédric

The answer is simple: The San Francisco clown (who hides behind the e-mail account of that young lady) will say anything for money. Whoever sponsors his phone-booth conference will be crowned as “the leading provider of prediction market solutions for collective forecasting”. For the San Francisco clown, the only metric is money (to him).

P.S.: At Midas Oracle, we like NewsFutures, CrowdCast and Inkling Markets for their merits —no need to bribe us.

There is now a prediction market industry, where I do a lot of consulting, most of which is to private companies.  Most of these are on prediction markets, but some are decision markets.

What Robin Hanson does not say to his gullible readers (mostly, young collegians who have no experience of real-life forecasting) is that:

1. When you ask any non-ideological researchers, these days, on the value of prediction markets over simpler collective intelligence mechanisms, they tell you either that the benefit is very, very small or that it is non measurable (i.e., it probably does not exist).
2. Half of the so-called EMP industry (a microscopic industry that lives on hype and trial balloons, it should be said), which Robin Hanson is so proud to belong to, has abandoned enterprise prediction markets. Notably, NewsFutures (founded by a Robin Hanson fanboy, and advised for years by Robin Hanson himself) and CrowdCast (a VC-backed venture) have (independently of each other) decided to stop selling proposing EPM SaaS only to customers, and focused instead on simpler and more social mechanisms. For more information, I recommend my readers to go conversing with Emile Servan-Schreiver of NewsFutures, who has a lot to say about this issue. Emile is well versed into both the research and the practical sides of collective intelligence used within companies. [UPDATE: See Emile's comment.] Mat Fogarty (who, him, as experience in real-life forecasting for business) and Leslie Fine (a scientist) of CrowdCast are also good interlocutors.

Contrary to Overcoing Whatever, Midas Oracle publishes both the good and the bad about prediction markets. We do not censor the bad news. We do not cherry-pick the good news. You will notice, in the near future, that we will publish information that supports the opposite thesis (that is, EPMs are the panacea), and then we will link to Inkling Markets as the best interlocutor in town. We try to publish about both sides (EPMs are no good, EPMs are good), not because we are “bi-polar”, but because the jury is still out on this matter, and our readers need to have both arguments put under their very nose. Act one today.

As I said the other day, our prediction exchanges don’t have the first clue about working with the search engines, for the sad reason that their managers are not Internet literate. This is an opportunity for any savvy prediction market startup to take over the old giants who have this Achilles’ heel.