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Some Market Price is Probably More or Less Accurate at Some Moment in Some Marketplace (& Socio BIZ Rule #2)

Over the past few weeks, I have asked my readers to come along on rather intellectual exercises. Now I feel the time is right to begin turning our fitness journey towards some practical, “real life” results — basically applications and insights into the way the world actually works (according to my theories 😉 ).

Note that for people who are completely untrained in my “thinking outside of the box” approach, attempting to grasp such advanced intellectual analyses in a quick scan will probably not work very well, because most people have already acquired so many “common sense” biases over time, that suspending belief in such popularized mainstream truths (as if they were undeniable, simple “facts of life”) will probably be too much to handle for unprepared readers. Questioning just one common sense bias is already difficult enough. Questioning many at the same time is going to make most readers so uncomfortable, that instead of going along with the exercise they may be quite prone to abandoning ship, bailing out and returning to the flock of mainstream followers, seeking comfort in the safety of numbers.

My readers will luckily now be able to reap the rewards of their patient and diligent training. A couple days ago I did a Google search (and also some other searches), with this idea in mind: let the searcher be a user wanting to buy or sell something, with no knowledge of brand names such as eBay or CraigsList (or even Amazon). Let the user simply search for “marketplace” — you can see the results I got at https://squ.data.blog/2022/08/27/marketplace .

Standard Queries + Utilities analysis: “marketplace

If you have read all of the over thirty chapters of this book project so far, you may already be able to explain these results much in the same way as I can. Yet since I am by no means perfect, my description of the phenomena is also not perfect — and what is more, I just now realized I have even made a mistake in my analysis presented at SQU data (which I will therefore need to revise). Beyond the difficulty of showing the “full list” of results (actually only the first “SERP” or “search engine results page”), I also made the mistake of not including some local results presented by the “Bing” search engine (since they were obviously faulty) — this also needs to be shown (even if it these results were shown in a small area off to the side of the page). [1]

The choice of the term “marketplace” was in no way haphazard or random. Markets and marketplaces are a central theme throughout the entire “Social Business” story. Beyond that, the term itself is rather generic — in other words: it tells practically nothing about what the user wants to buy or sell. And this directly points to the top result, probably the most significant finding:

Facebook is somewhat surprising, though the company does provide a service referred to as “marketplace”

Our first question ought to be: Why is Facebook shown as the #1 result? Personally, I can think of many results that are far superior to Facebook — especially since Facebook will not show any information unless the user is willing to give the company the company’s required personal data about the user. Another remarkable caveat is that to some degree, Facebook is actually a competitor to Google — since both companies are heavily invested in the online advertising industry. It could also be considered a competitor to Bing, except that Bing belongs to Microsoft, and Microsoft actually also holds stocks in Facebook. What the top results show first and foremost is that all of the companies involved are trading in “PII” (“personally identifiable information”) — personal data about the user.

As an aside, I want to note that I did the SQU analysis using Edge (which is software managed by Microsoft). Normally, I use Firefox, because it allows me to more easily manage how much PII I am willing to share online (via my browsing behavior).

The intriguing question that remains from this first result is why Google would be willing to hand over their own user to this second-rate result — which is actually a competitor? My hunch is that Google is actually happy to be rid of this user, because a user searching for such a generic term as “marketplace” cannot easily be sold to any other advertisers (as, for example, on mainstream media websites displaying Google Ads, or on any other Google sites such as YouTube). I might speculate even further and go so far out on a limb as to say that perhaps Google expects the user’s experience to be so poor with this #1 result that they would return to Google — which of course makes no sense whatesoever, unless the user decides to choose another term … which Google could then (presumably) more easily sell to advertisers.

Which brings us to the title of this post — a lengthier but more exact statement than “the market price is always right”. Is Facebook paying any money to show up as the #1 result? Presumably not, as this #1 result is not displayed as an “ad” (or “sponsored result” or whatever). Is Facebook perhaps paying for this placement with any user data? It cannot be completely ruled out, but I would consider it quite unlikely for competitors to share data with each other. What I think is most probably the case is that Google, recognizing that they cannot make any money from this user, is willing to use the data they collect directly from the top 10 results links on this SERP to further refine the next results Google presents to this user (should they return to Google at some point in the future — whether in one or two seconds or in one or two years … machines don’t care, because machines never forget [2] ).

What about the other results? For most (indeed quite probably for all of them), the payment to the search engine comes in the form of a combination of ads and PII (user data). Ironically, I think many website developers view the data they give to so-called “analytics” companies as a way to “optimize” their standing in search engines. There is virtually no one who will point out the fact that surrendering user data to the analytics company (which is usually the same company that develops the search engine, or is perhaps simply closely linked to that company) is a kind of payment to the search engine (in data units, rather than monetary units). This becomes a reinforcing feedback loop, in which developers hoping to improve their website rankings are motivated to give ever more user data to search engines — and indeed, the search engines are also incentivized to rank websites highly which provide more information about the website users to the search engines.

Now let me cut to the chase. There are many possible takeaways and follow-ups to these insights. The first one I would like to present here and now is what I will refer to as Socio BIZ Rule #2:

There is no general market price — market prices vary according to marketplace (i.e., whether a marketplace is well-suited to the good or service in question) … and (ceteris paribus) online marketplaces are characterized more by topical focus than by geographic location.

[1] I plan to make these revisions before publishing this post
[2] Another interesting aside regarding this comes from an exchange I had with Pierre Omidyar (the founder of eBay) a long time ago about trust — whereas I maintained that I would extend trust based on just a few weeks of historical evidence, Pierre noted that his experience with eBay led him (or rather his company) to a much longer term historical analysis of trustworthiness. Note, however, that my flippant phrasing here somewhat unintentionally draws attention to the (infinitesimally small) cost of data storage.
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