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Is web 2.0 really just about price discrimination?
If data is a commodity, can you price discriminate even if you spent a lot of money collecting the data?
Sections: Business Emerging Practice
I'm listening to “What is a sustainable business model for data?” at O'Reilly's Where 2.0. The guy from Navteq has mentioned that they sell data based on use. In other words, they are trying to price discriminate. Non-commercial use is free. What is non-commercial? Maybe it means not making a lot money yet, so we won't pursue you.
The guy next to me describes this as problems looking for solutions. It might just be market research. “Hey, try this, and we'll start charging once we see you making money, and we may even tier that,” say the data providers. It will be interesting to see what enforcement mechanisms these data providers come up with for people who are already using their data and suddenly start making money.
At lunch, I had one guy from a stealth startup argue to me that competition among providers would force down prices. In other words, data would be commoditized. Are all of these providers' location data equivalent? Are providers just kidding themselves by thinking they will be able to price discriminate?
Bud posted this on June 29, 2005
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Comments
I am doing investment research on NAVTEQ and wondered if you have any experience working with their team or products.
Specifically, I am curious to what value they add on future mobile devices and internet applications.
It sounds like this “local” market will be huge so I appreciate any insight you have.
Best,
Matt
Posted by: Matt at July 2, 2005 07:29 PM
