Freedom's Fidelity

Wednesday, December 08, 2004

Carnival of the Capitalists

It has been a while since I have submitted something to the Carnival of the Capitalists, but I am proud to say that my Vaclav Havel on Communism post below is part of this week's edition. I am always amazed at the quality and diversity of the submissions. Everything from models for selecting stocks to using a blog for marketing/promotion, to classic macroeconomic questions and all things in between. This week's edition is no exception, so go read the Carnival of the Capitalists.

On a related note, I found this article from the WSJ on market research really interesting. Here's an excerpt:

People who rave online about their favorite new gadget -- or gripe about the products they hate -- are turning heads in the business world.

The growing popularity of blogs and other online forums has prompted companies to pay more attention to what is being said about them on the Internet, and has given rise to a new kind of market research aimed at finding useful information in the sea of online chatter.

For more than a year, car-maker Volkswagen AG has used a service by Techdirt, Foster City, Calif., to find out which new technologies are generating the most buzz online, with the aim of integrating some of them in new automobiles. "I think [Web sites] are very important as a source of unfiltered information, but there's too much information out there already. Frankly, we don't have time to keep track of all these things," says Daniel Rosario, a senior engineer in Volkswagen's electronics research lab in Silicon Valley.

Mike Masnick, 29 years old, founded the Techdirt market-research service in 2000, to help bring in revenue to support his blog, also called Techdirt. "We needed something to do to make money, so we started discussing how we were going to turn it into a serious business," he says. Techdirt compiles regular reports for Volkswagen and other companies based on items that appear on blogs and message boards, as well as in mainstream news outlets. The service starts at $2,500 a month, and can cost more than $10,000 a month, Mr. Masnick says.

Fascinating stuff. As information becomes cheaper and more accessible, firms are able to make use of it and put out a product that more accurately reflects consumer preferences. The result: more highly satisfied customers, more profits for the firm, more wealth is generated for all parties involved. I love markets!

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