Slashdot Mirror
Microsoft Invents Price-Gouging the Least Influential
theodp writes "In the world envisioned by Microsoft's just-published patent application for Social Marketing, monopolists will maximize revenue by charging prices inversely related to the perceived influence an individual has on others. Microsoft gives an example of a pricing model that charges different people $0, $5, $10, $20, or $25 for the identical item based on the influence the purchaser wields. A presentation describing the revenue optimization scheme earned one of the three inventors applause (MS-Research video), and the so-called 'influence and exploit' strategies were also featured at WWW 2008 (PDF). The invention jibes nicely with Bill Gates's pending patents for identifying influencers. Welcome to the brave new world of analytics."
Isn't this a business method patent?
I'd swear that's what the merchandise bags they give out at movie premieres are. The celebrities get stuff free, wield their influence over those susceptible to influencing who rush out and buy it. $0->$x.
"There are no facts, only interpretations." --Friedrich Nietzsche.
I can't believe, that some pricing strategy is patentable. Is this a joke (I'm a layman in such matters)?
Approaches like this are pretty direct attacks on why free markets work. Almost all classical and neoclassical economic theory assume things like the existence of a supply/demand price curve, availability of pricing information, etc. If you have some nutty system where price curves aren't really defined beyond an individual level, prices aren't widely available, etc., all the usual pricing signals, resource allocation by the "invisible hand", etc., get a lot more muddled, and probably begin to break down.
Of course, that's certainly a reason I can see Microsoft wanting it: finding ways to profit other than "make a good product and compete fairly on the open market" is their modus operandi.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
[0004]The described implementations relate to social marketing. One technique identifies potential buyers of a product where the potential buyers belong to a social network. The technique determines a price to offer the product to individual potential buyers that considers both influence of the individual potential buyer within the social network and overall revenue from sales of the product to the potential buyers.
[0005]Another implementation identifies potential buyers of a product in a social network. The implementation arbitrarily selects a set of the potential buyers to offer the product at a relatively low price to influence the remaining potential buyers. The implementation also updates membership in the set by adding and removing individual potential buyers from the set until revenue from product sales to the social network is not increased by adding or removing an individual potential buyer from the set. The above listed examples are intended to provide a quick reference to aid the reader and are not intended to define the scope of the concepts described herein.
The rock stars get their guitars for free (Paul McCartney once commented:"When you're poor you cant' afford them and when you're rich they give them to you.) is the same thing.
Or how about paying celebrities to use your product.
Now the randomly selecting people part. What's wrong with that? So they're trying to accelerate the product to the tipping point.
This will hurt no one and this was just an "article" to have an excuse to bash Microsoft about something. *yawn*
It's NOT me! It's the meds! I'm on 1000mg of Fukitol.
Influence mapping scares me deeply. It completely devalues the entire concept of friendship, turning every relationship into a marketing channel, every person into a spambot zombie hoping for a discount from sellers or a better performance appraisal at work.
I would love to see the practice outlawed, but data mining is becoming so pervasive I don't know how you prove its even happening without catching differential pricing caught in the act.
People will find ways to game this system, just like people gamed search engines with Google bombs.
If you think blog spam is bad right now, just you wait.
So now MS is patenting Game theory.
What netx, algebra ?
I would assume that the open source movement has a mole within Microsoft, because this looks like a big win for open source software.
This is the most evil plan related to software that I think I've ever heard. Their plan is basically to prey on the weak. Are they going to patent stealing candy from children next?
FTFP: "The technique determines a price to offer the product to individual potential buyers that considers both influence of the individual potential buyer..."
Microsoft wants to pay its customers to astroturf for it. Where I come from that's called a kickback, bribe, or politics as usual.
Let's be blunt here, if one side ceases to play fair, I see no reason in not following.
So what's the requirement to be seen as "influential"? Having a shitload of friends on facebook? Great. Let's start a group dedicated to the sole purpose of having friends. People you don't know or don't care about, as long as you have a lot of friends you get crap cheaper? Works for me.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
A pretty close one: having the option to disable slashdot ads based on user karma.
this is exactly what the US Congress has been doing for years (Price-Gouging the Least Influential).
"National Security is the chief cause of national insecurity." - Celine's First Law
You cite a mac related website to abuse Steve Ballmer? That's funny.
As for your question:
>>Could someone with no technical knowledge make a high-tech company profitable without an abusive virtual monopoly?
Just like the other Steve?
With Windows 7 release.
'Influential' people (loud online and offline how Vista sucked) and enthusiasts (basically same as first group) were given discounted versions of Windows 7 (win 7 parties, pre-release discounts, school discounts, etc.)
And they all took the bait, told the world how Win 7 is great... and guess what? You can't buy discounted version, you have to shell out $120 for cheapest upgrade. The student version offer is about to end as well, and family upgrade option 3-for-150 has been discontinued.
Sadly, it works, now everybody wants or considers Windows 7.
I sure hope that most linux users are not in there only b/c of the price in $. IMHO, linux is not just a price tag, it's a philosophy, a way of being!
I'd buy large quantities of their products at a low price and resell them for a small markup.
With the Internet, everyone has a voice. Everyone is not equal, but everyone has a voice. There are so many places, forums on sites like this being the best example, where people can express themselves that even if you are completely non-influential online in general terms, your voice can be heard by millions. Also someone who isn't influential can suddenly become influential. My website is not influential, it isn't intended to be, few people come to it unless they are after something in particular on there. However, if I put something on it, and Slashdot links to it, suddenly it is influential for that item. My voice went from meaning little to meaning lots.
So the problem you get is that if there is differential pricing going on, people will quickly find out. If it is something like you've been sending out discount codes to preferred customers that reduce the price, those codes will quickly be posted all over the Internet. If it is something like you give people a great deal via their account and tell them to tell their friends, well then quickly it becomes apparent that not everyone gets a great deal as they talk about it, and this will get posted on the net.
It is just the sort of thing I don't see working. There is so much content submitted by random people (like our comments), so many forums for expressing yourself, and the potential for a single post to become of major international note. You can't control that sort of thing.
I don't think the clothes I buy at Target are worn by a "star" ... but I could be wrong, mainly because I don't pay attention to such things. I buy clothes there because ... I like the styles, and the prices are cheap. I discovered this simply by walking past them in the store.
The mind is a complex beast, but what we do know it's associative. For example when you hear a particular song, you might suddenly find yourself thinking about some special time they played that song. Those emotions "rub off" on the song itself and makes you feel happy just hearing the song. It's the same with ads, you're not going to like take commands from ads. What it will do is link these products to people that are cool, rich, famous, sexy or funny so those thoughts will rub off on the product. In a way, the mind is much better at remembering this than our conscious stream of thought - we'd be overwhelmed otherwise - and the marketers know to use it. You think you're looking at the product, but your mind is really pulling up these associations that say "cool people wear this" and believe it or not, it's what makes people pick one shirt over the other almost similar shirt in the other rack. If people realized they'd feel like a puppet on strings and very few want that, I think it's more likely you've been well marketed to than not marketed to.
Live today, because you never know what tomorrow brings