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."

Comments

Well...

[cheesybagel]

Bill Gates also used to think his MSN proprietary network paywall would have more success than any silly Internet thingie. What he fails to realize is than in an Internet era, where price information travels rapidly, prices converge towards fixed prices. Not this drivel.

Isn't this a business method patent?

Re:Well...

[Anonymous Coward]

It think the point of this patent is that those people who are "less influential" will not have the means to tell the world they have been ripped off.

Re:Well...

[Anonymous Coward]

When you have many "less influential" people talking to each other and complaining about the same thing, you suddenly have an "influential" mob

Should fail due to prior art.

[Sebilrazen]

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.

seems dangerous

[Trepidity]

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.

Re:seems dangerous

[Tom]

Approaches like this are pretty direct attacks on why free markets work.

Yes, they are. Surprised to see a direct attack on the free market by a convicted monopolist? ;-)

Nobody, and I'm serious on that, not the most convinced communist, not the most radical islamic fundamentalist, hates a free market as much as major corporations. Pretty much everything that determines a free market is an obstacle towards their ultimate goal: Unlimited, guaranteed profit.

I'd have thought after the financial crises more people would've noticed.

The commercialization of friendship

[Fractal Dice]

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.

Re:The commercialization of friendship

[snooo53]

This already happens to some extent with friends who are part of a multi-level marketing type company (Avon, Mary Kay, etc..) or with school/church fundraisers. The only difference here is that it is digital and therefore much easier to ignore, and much harder to guilt trip someone into purchasing to help out a cause or a friend

Re:The commercialization of friendship

[honkycat]

I have an easy solution to that. Anyone who tries to sell me MLM stuff ceases being my friend.

If I were an conspiracy theorist

[Presto Vivace]

I would assume that the open source movement has a mole within Microsoft, because this looks like a big win for open source software.

Wow

[MadUndergrad]

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?

Prior art

[gmuslera]

A pretty close one: having the option to disable slashdot ads based on user karma.

Meh. There's prior art...

[msauve]

this is exactly what the US Congress has been doing for years (Price-Gouging the Least Influential).

They have thoroughly tested this

[postmortem]

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.

Re:Linux users

[kenshin33]

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!

Re:Already an established business practice

[Kjella]

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.