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.

Now is time to give you some background information about last week’s incident. As you all know, somebody was irked by what I said about the EPM software vendors and set up, not one, but two websites denigrating moi.

#1. I don’t care if someone makes a fool of moi. I am fair game. Plus, it gives a laughing opportunity to the Chief Economist of Midas Oracle, because it is revenge for my making fool of him when he is so wrong about the article in The Economist or else (follow the HubDub link given by Mike Linksvayer).

#2. My big concern with that attack is that it might well come from somebody I know —and who has always had the kindest words for me (including last week). So, that person might well be a hypocrite, and my trust in him (and his prediction market company, if any) will be wiped out, if my suspicion is confirmed.

#3. My secondary concern is that that attacker (who might well be a prediction market software vendor or a disgruntled employee) tried to put the blame on NewsFutures (both a prediction market software vendor and a public prediction exchange) for the 2 websites (“Chris F. Masse is a Fraud”, and “Overcoming Midas”). Just after that the 2 websites were discovered (by one innocent reader, who simply followed the web link posted by a commenter, “The Colonel”), many people e-mailed me to tell that I should do a “reverse IP lookup“ to find out who is behind… I did… The result was “dev24.newsfutures.com”. I was very surprised to see NewsFutures involved in this attack, and I sent the link to Emile Servan-Schreiber, who, first, expressed astonishment, and then forwarded the link to his CTO (Maurice Balick, some of you know him very well), who is a computer whiz and a master of “The Internets” —as would say former president George W. Bush.

It turned out that:

- NewsFutures sent a “cease and desist” letter to the webhost of these 2 websites. Here is a very short excerpt of the NewsFutures letter:

That IP address provides a Reverse-ARP record containing dev24.newsfutures.com. However, we own the domain newsfutures.com and we have never authorized anyone to setup this fake RARP record.

- In the meantime, following the brouhaha made on Midas Oracle when the IP address of The Colonel was revealed, the attacker cleared the RARP record during the night so that it no longer pointed to NewsFutures (the non-existent dev24.newsfutures.com address).

- There are other technical and legal developments to this case, but I am not at liberty to talk further.

- However, I would like to explain to you how it was possible to put the blame on NewsFutures… even though Emile and his team had nothing to do with this attack.

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The Reverse IP Lookup is so easy to fudge that it’s totally meaningless. It’s something that prediction market people should know about, so that, in the future, they would not be fooled into drawing conclusions from this kind of “evidence”.

To understand how one could fraudulently make a reverse IP lookup point to a newsfutures.com domain, Emile and Maurice bought a $20 slice on the webhost where the chrismasse.com and overcomingmidas.com websites were hosted. The hosting service then lets you set the “reverse DNS” to any URL that you like, and within a few seconds the Reverse IP Lookup tool on iWebTools will point to the URL that you chose. As an example (and as a blink-blink sign to Mike Giberson and Mike Linksvayer), Emile and Maurice made the IP point to “dev24.midasoracle.org”.

Try it: http://www.iwebtool.com/reverse_ip?domain=67.23.8.251

CONCLUSION: Someone tried to incriminate NewsFutures (and fuck with our readers’ mind) by setting up these agressive websites and having the Reverse IP Lookup point to a fake NewsFutures URL.

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UPDATE:

Did the attacker try to pin it on, not just one, but *two* prediction market software vendors?
http://www.midasoracle.org/2009/03/13/did-the-attacker-try-to-pin-it-on-not-just-one-but-two-prediction-market-software-vendors/

Dear Mr. [PROFESSOR'S NAME GOES HERE],

I am writing on behalf of [PREDICTION MARKET SOFTWARE VENDOR'S NAME], a Netherlands based consulting firm, because our research has identified you as a scholar with some expertise in Prediction Markets or a related field. [THEY JUST SCRAPPED MIDAS ORACLE'S LISTINGS.] We would like to assess your suitability and interest to join the panel of scientific advisors with [PREDICTION MARKET SOFTWARE VENDOR'S NAME] (www.url.com).

In doing so, we propose to explore your area of experience and knowledge of Prediction Markets. Having established this, we would like to list you as our scientific advisor on your area of expertise on Prediction Markets. This will allow us to seek your services for a negotiated fee, once your particular expertise in developing or interpreting a Prediction Market issue is required.

I trust this message clarifies in short the mutual benefits in our cooperation. Please feel free to contact me to discuss further details.

Sincerely,

[LOW-LEVEL EMPLOYEE'S NAME GOES HERE]
Communications Manager
[PREDICTION MARKET SOFTWARE VENDOR'S NAME]

Next: How some US-based university professors endorsed a Holland-based consultancy firm

1. No need to wonder why. Adam Siegel (the Inkling Markets CEO) is an active participant in the discussion —thru his blog, thru comments on Midas Oracle, and thru private e-mails. (I told many times Dave to catch up. Pissing in a violin in order to compose a symphony would have been more fruitful.)
2. Having a prestigious “Chief Scientist” is not such a determinant. It only impresses a few young, inexperienced and gullible spotty collegians. What makes the difference on the Web is your openness —more exactly, how much high-quality information you are willing to publish, free of charge, free of advertising, and free of copyright. Take a look at Inkling Markets. Adam Siegel has made the hell of an effort to make available many explainers and case studies on enterprise prediction markets. I don’t agree with everything he says, but I reckon that he is the only one to make the effort to reach out to web readers.

In the end, whether the judge is Google or Chris Masse, the passing of time is important. It allows us to see thru prediction market people. There are those who matter —and those who don’t.

Addendum:

Google PageRank:

Inkling Markets: 6 / 10
Consensus Point: 5 / 10

All the prediction market vendors I know of are bullish.

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SalesForce

My Starbucks Idea

Dell’s IdeaStorm

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No need of trading technology to get feedback and suggestions from employees. A simple voting mechanism is more than enough.

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Previously: Enterprise prediction markets give voice to serious, technology-minded professionals who really know their vertical (engineers, analysts and contractors) —and reveal how frivolous and unpertinent most horizontal managers are.

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NewsFutures, Consensus Point and Inkling Markets were self-funded, are now profitable, and are continuing to address their customers’ problems with a continually improved technology. These 3 prediction market software vendors are proving that you can create a sustainable business without the need to get “funded” by angel investors or VCs. With the money from those guys also comes the pressure to “monetize” every thing. It’s not always a good thing to have the suits running the show. NewsFutures, Consensus Point and Inkling Markets are still in the hands of their founders, and they are still free to execute their vision —the way they want.

What’s your view, folks?

Using Prediction Markets to Track Information Flows: Evidence from Google – (PDF file – PDF file) – by Bo Cowgill, Justin Wolfers, and Eric Zitwewitz – 2008-01-06

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Bo Cowgill:

[...] Trade-by-trade data can reveal characteristics of specific working groups: What they know, how they feel, how they process and share information and how all of that changes over time. I didn’t try to put any of this in the paper because the conclusions would be sensitive, and I thought this application was pretty obvious to anybody who understood our methodology. [...]

Bo Cowgill:

I’ve also heard that other companies would find it impossible to analyze the interaction between their market and the organization. Why? Lack of data. [...]

Bo Cowgill:

Some more remarks about applications that combine prediction markets and organizational data (org charts, social networks, seating locations). The obstacle to these applications is not a lack of data. Jed mentions privacy concerns — and if he thinks this is a big obstacle then I’d be interested in discussing his thoughts.

A bigger problem is that that current prediction market vendors and consultants cannot support these applications. At heart, these vendors are software engineers and salespeople at heart, not statisticians or data miners. They want to write one system that can support lots of clients. At conferences, one hears PM vendors complain about having to do “customization” work for clients.

This approach would not work for the applications I describe for two reasons:

1. The inputs for different clients won’t be the same. Each client’s organizational data will likely take a different structure. This makes it difficult for prediction market vendors to architect a single system that can served many clients (yet another challenge with integrating markets with other corporate IT services).
2. The outputs for different clients won’t be the same. The business relevance and statistical power of each analysis will differ with each client’s data.

Prediction market vendors may also need to familiarize themselves with the statistical learning methods necessary to fully utilize these rich datasets. So what’s the solution? First, move to a software-and-consulting model. By ‘consulting,’ I don’t mean ‘consulting on how to implement the market.’ I’m talking about helping the client solve its problem using a variety of data, including prediction market data.

Second, the vendors also need to pitch prediction markets as more than a forecasting tool. People in the business world commonly identify as data junkies — probably more so than they identify with the ‘wisdom of crowds’ ethos. It is unclear how much companies really care about accurate forecasting anyway.

HSX software certainly has a lot of head room to offer to a relatively small project such as Storage Markets. Given the prediction market software vendors available to us during late 2005, we were very happy with our choice of HSX. Alex and his team at HSX provided excellent customer service and were extremely supportive of our experiment. [...]

Being the most popular blogger on prediction markets, I receive many inquiries from firms, and exchange with them views on available solutions. In late 2007, here are the best prediction market software providers:

• CDA: InTrade-TradeSports and NewsFutures.
• MSR: Consensus Point, Inkling Markets, and (recently) Xpree. (MicroSoft PredictionPoint, soon.)
• No Fortune-500 firm and no prediction market expert has ever talked to me positively about HSX (as a software provider).
• Companies prefer dealing directly with the software provider as opposed to some stand-alone consultant —unless that consultant is in a geographical zone far away from the software vendor’s home territory and the software vendor executive doesn’t want to travel.

Previously: Storage Markets, powered by HSX, has just bellied up.

HSX software certainly has a lot of head room to offer to a relatively small project such as Storage Markets. Given the prediction market software vendors available to us during late 2005, we were very happy with our choice of HSX. Alex and his team at HSX provided excellent customer service and were extremely supportive of our experiment.

Storage Markets, both the site and the business, were created to test a couple of specific business models based on prediction markets. Neither model appeared to yield the required ROI. Hence, we ended the experiment and returned excess capital to our investors.

Previously: Storage Markets, powered by HSX, has just bellied up.

UPDATE:

John Ives:

[...] Storage Markets was, what we called, a “semi-private” market. We limited trader registration to those who could convince us, one way or another of their involvement with the data storage segment of the IT industry. Our goal was to recruit traders from the entire value chain in our industry. This value chain spans semiconductors, systems, enterprise software, system integrators, distributors, VARs, analysts and importantly, end users.

The result was a very heterogeneous, diverse community of traders from all corners of our industry. The diversity of the community was crossed with relatively diverse market content. We believe this resulted in a broad set of traders and their respective insight on any particular question.

We regularly revisited and reevaluated our decision between semi-private and public market operation. The marginal improvement in the perceived benefit of a public market operation was contrasted against the cost. We could never convince ourselves and others that the expected incremental improvement in market quality was worth the cost at that time.

The perceived cost had two major components. First, the given the business models we were exploring, our corporate and media customers and partners were (right or wrong) very sensitive to the demographics of our trader community. A true public market would have reduced our customers’ perceived quality of our value proposition. I suspect, over time, this objection could be overcome as our customers became more comfortable with prediction markets.

Second, the discussion forums and chat rooms associated with our semi-private market had the characteristic of having a very high signal to noise ratio. The content generated by our community added a significant about of information to the market. We observed that public markets appeared to have a much lower signal to noise ratio in their various discussion forums. We were not interested in reducing the value of our discussion forums. [...]

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External Link: John Ives’s blog