Warren Buffett, perhaps the greatest investor of all times, prefers his holdings to have what he calls a `moat’; some form of protection that sets a business apart from the competition, similarly to how a moat protects a castle from intrusion.1 The economic moat should function by making it impossible for rivals and new entrants to outcompete the established one. It can be a cost advantage, a well-known brand, a cemented connection with customers, infrastructure already in place, or special know-how, possibly a patent portfolio.
If you believe in keeping science open, then you should be wary when you sense something similar happening in research. Continue reading
I originally wrote the entry as an online article and it ended up being quite long. So I decided to start with an extra summary to present the core idea briefly. Well, it made the whole thing that much longer.
Advertising connects demand with supply: it connects people who have money to spend to fill a need (or to splurge out on a luxury) with businesses which want to reach customers. It is in the buyers’ interest that they are only exposed to advertisements that help them in their purchasing decisions. It is in the sellers’ interest that their adverts mainly target consumers who are potential buyers of their goods or services.
In online advertising, buyers need information about products and sellers, while sellers need help to target their ads at potential buyers. Help might come from a dedicated provider (either by people employed for this task or in an automated way from some remote server), while the alternative is that it might be provided by some online community. These are independent aspects, as the table shows with some examples.
||seller to buyer
||buyer to seller
||independent product reviews; Google AdWords, Amazon, eBay
||browsing history (Google, Amazon)
|In a distributed fashion/socially
||Amazon, eBay; Pinterest
My observation is that I do not know any participant in the field with ? but Facebook is in a position to enter that space. Continue reading