Oren Etzioni, frustrated to learn that many passengers booking a flight after he had, were able to pay less - contrary to conventional wisdom. He then 'scraped' information from a travel website from a 41-day period to forecast whether a price was a good deal or not, founding Farecast to offer this new ability. Etzioni next went on to improve the system by digesting data from a travel stie that covered most American commercial routes for a year - nearly 200 billion flight-price records. Before expanding to hotel rooms, concert tickets and used cars, Microsoft snapped up his firm ($110 million) and incorporated it into it Bing.
This is an excellent example of how big data enables consumers to capture economic value in the information economy.
Etzioni went on to co-found Decide, which in the same vein, uses big data to help consumers decide whether they should buy a product now or wait for the price to drop. A sample recommendation:
Today, it was announced that Decide was purchased by eBay for an undisclosed amount.
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This is quite interesting, especially knowing that big companies like Microsoft and eBay are acquiring big data companies like FareCast and Decide. Would this kind of big data analysis convince companies to keep their prices consistent in order to avoid people waiting for the price to reduce before they make a purchase?
ReplyDeleteThese companies are also exposing the price discrimination tactics of the (e)retailers. Search cost is getting cheaper for all of us (consumers), it will be interesting to follow the evolution of this cat-mouse game. should it be the end of the future of perfect price discrimination?
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