Archive | September 28, 2015

WAITBUTWHY, the blog that you should not miss.

Once we were told in the lecture that we had to write a blog post there was one thing that immediately came to my mind that I needed to share: WAITBUTWHY. This is the website of Tim Urban,  where he does a “new post every sometimes”. I ended up on his blogging-website beginning of this year via a tweet of Elon Musk who posted the following:

The above post is part one of an incredible two-part post about the revolution of Artificial Intelligence, which of course is crazy interesting as well as a good fit with our current choice of education.

Tim Urban has an amazing style of writing and real talent for telling a story though his posts. He also makes his own drawings which makes his posts even better. The main reason for the success of his blog is, in my opinion, that he is able to take incredibly huge and sometimes difficult subjects and manages to tell everything about it in a very interesting way that everyone will understand.

This is probably the reason that he got the opportunity to make the following post, which starts as follows:

Last month, I got a surprising phone call.

Well, to see how this continues and to what amazing posts this will lead you’ll have to check it yourself:


On there are many other interesting and entertaining posts which will take a lot of your time to read, especially when you actually need to study or do other stuff. Don’t say I didn’t warn you.

Besides some of the very high quality posts about the course related subject Artificial Intelligence there is another reason for sharing this blog. In today’s world, information is abundant and available 24/7.  The majority of news articles, social media updates, headlines and other information that comes your way are short pieces of information. This is useful and keeps you up-to-date with what is happening around the world. But for a lot of these news flashes the main focus is to let you know something as soon as possible before you actually lose attention and switch over to the next article, Youtube-video, Facebook-chat or Whatsapp message. We are distracted continuously with these unlimited amounts of data pushed on the world wide web and to our devices. Even without the internet, it is the innate bias of the human brain to be distracted. Reading long sequences of pages from longer articles and/or books lets us develop a mental discipline (Carr, 2010). This mental discipline helps us to focus better, be more creative and be more productive.

That brings me to the other reason for sharing this blog. My guess is that most of us (including myself) don’t really get a lot of opportunity for those long reads in our daily lives and that seems to be a huge miss. This is actually not so strange if you think about it. A really long and indepth analys of something is quite rare in between all those quick and all-the-time updates. So with all the information that we encounter in our everyday lives, reading a somewhat bigger blog, article or book now and then seems to be a good strategy to keep our focus.


Technology of the Week [Team 9] – vs Priceline

For our technology of the week we chose 2 businesses that, in our opinion, have an innovative business model: and Priceline.

First of all, the Internet has become a vehicle for electronic collaboration through e-markets that exchange both information and knowledge (Standing, 2000). is one those e-markets. It is an intermediary that allows the offering companies (the sellers) to put up products and/or services for auction which potential buyers can bid on. This is an example of an English auction (Businessdirectory, 2012).

Priceline uses a reverse auction. Reverse auctions can be used as a response to cost savings and differ from traditional auctions like English auctions such that the lowest unique bidder wins and not necessarily the highest (Gaggero, 2012). offers the customers value by putting effort into the content and its user-friendliness. It makes an attractive partner for (smaller) companies who need more promotion for their products/services and we expect their user-base to grow even more in the near future.

We would like to refer to the following table for’s SWOT and Porter’s five forces:


Naamloos3 provides the customers with flexibility to bid based on their own preferences. On the other hand, it helps vendors to sell the products that are unsold and provide extra revenue. Priceline also provides the suppliers show anonymously; it can avoid its regular retail business from being harmed, it protects the existing brand.

Priceline’s SWOT and Five Forces:



Similarities SWOT

Both companies have strong market position. However, the industry has low entry barriers for new competitors. They are both positioned in intensively competitive market.

Differences SWOT

Name your own price by is protected by a patent whereas the technology of is not patented. pays a lot for online advertising whereas relies more on word-of-mouth advertising. expand the market by acquiring companies, while try to grow beyond international boundaries on their own.

Similarities Business Model

Both firms are active on the B2C markets. Both businesses quickly expanded to neighboring countries (e.g. Belgium and Canada).Due to the first-mover advantage, the technology companies could obtain a strong position in their markets.

Differences Business Model

Revenue model used by claims a fixed share of five Euros for each transaction, while Priceline makes use of ‘Opaque’. provides product such as travel tickets where is much more diverse with tickets for leisure time activities.

Future predictions:

Travel booking is a highly competitive market, mainly as a result of low barrier to entry. Traditional travel booking system still has a considerable amount of market share, and auction-based travel booking is yet to become the frontrunner. and could both grow exponentially by increasing their exposure in foreign countries. We predict will continue this effort in the short and long run, and will start the same tactic when it expands internationally. The looming economic volatility casts uncertainty on the industry’s future outlook. However the concern is fairly minimal in the near future.

Team 9 

J.H. Aben – 171724

L. Keijzer – 355076

K.B.T. Tram – 355313

C.K. Nguyen – 361546

Electronic Markets, Computing Power and the Quants: Volatility & High Frequency Trading

Electronic Markets, Computing Power and the Quants:  Volatility & High Frequency Trading

Markets can be – and usually are – too active, and too volatile”

Joseph E. Stiglitz – Nobel prize-winning economist

As some of you might have noticed, the oil market is currently showing wilder fluctuations at a higher frequency than before: volatility has increased. This happened after the market enjoyed relative stability price stability during the last few years. Of course, this is partly due to U.S. shale oil production, quite high supply and lower demand due to the financial crisis aftermaths, and growing demand and supply uncertainties. However, another factor affecting volatility is the increased usage of trading indicators in combination with changes in trading practices: an increasing number of players in the financial markets tend to use algorithmic and high-frequency trading practices (HFT).

Like other derivative based markets, also the crude oil market has a wide range of market players of which many are not interested in buying physical oil. HFT traders are probably drawn towards oil futures due to the market’s volatility. Because, the greater the price swings, the greater their potential profit. HFT is not an entirely new practise, but as technology evolves it is increasingly present in today’s electronic financial markets.

These players make extensive use of computing and information technology in order to develop complex trading algorithms, which are often referred to as the “quants”. HFT trading firms try to gain advantage over other competitors which are still using mostly human intelligence and reaction times. The essence of the game is to use your algobots to get the quickest market access, fastest processing speeds, and perform the quickest calculations in order capture profits which would have otherwise been earned by someone who is processing market data slower (Salmon, 2014). At essentially the speed of light, these systems are capable of reacting to market data, transmitting thousands of order messages per second, as well as automatically cancelling and replacing orders based on shifting market conditions and capturing price discrepancies with little human intervention (Clark & Ranjan, 2012). New trading strategies are formulated by using, capturing and recombining new information with large datasets and other forms of big data available to the market. The analysis performed to derive the assumed direction of the market makes use of a bunch of indicators such as historical patterns, price behaviour, price corrections, peak-resistance and low-support levels, as well as (the moving average of) trends and counter-trends. By aggregating all this information, the databases and its (changes of) averages are usually a pretty good predictor of potential profits for HFT companies.

This information technology enabled way of trading is cheaper for the executors, but imposes great costs on workers and firms throughout the economy. Although quants provide a lot liquidity, but can also alter markets by placing more emphasis on techniques and linking electronic markets with other markets (as well information as financial linking). In most cases, non-overnight, short-term strategies are used. Thus, these traders are in the market for quick wins and use only technical analysis in order to predict market movements instead of trading based upon physical fundamentals, human intelligence or news inputs.

Recent oil price volatility increased

Recent oil price volatility increased

Although, some studies have not found direct prove that HFT can cause volatility, others concluded that HFT in certain cases can transmit disruptions almost simultaneously over markets due to its high speed in combination with the interconnectedness of markets (FT, 2011; Caivano, 2015). For example, Andrew Haldane, a top official at the Bank of England said that HFT was creating a system risks and the electronic markets may need a ‘redesign’ in future (Demos & Cohen, 2011). Further sophistication of “robot” trading at decreasing cost is expected to continue in the foreseeable future. This can impose a threat to the stability of financial markets due to amplified risks, undesired interactions, and unknown outcomes (FT, 2011). In addition, in a world with intensive HFT the acquisition of information will be discouraged as the value of information about stocks and the economy retrieved by human intelligence will be much lower due to the fact that robots now do all the work before a single human was able to process and act on the information (Salmon, 2014). For those interested in the issues of HFT in more detail, I would like to recommend the article of Felix Salmon (2014).

However, it is important to mention that not only HFT and automated systems and technicalities do cause all the volatility. Markets have known swift price swings for centuries. For example in the oil industry, geopolitical risk can cause price changes as it is an exhaustible commodity. As most people know, also human emotions can distort markets as well as terrorist actions. Even incomplete information such as tweets from Twitter and Facebook posts can cause shares to jump or plumb nowadays. As markets are becoming faster, more information is shared and systems can process and act on this information alone quickly due to (information) technological advancements, which will in turn increase volatility. Therefore, it is more important than ever that there are no flaws in market data streams, e.g. the electronic markets and its information systems need to have enough capacity to process, control, and display all the necessary information to market players in order to avoid information asymmetries.

In my opinion, HFT is strengthened by the current state of computing technology and cost reductions of computing power now enable the execution of highly complex algorithms in a split-second. As prices go down and speed goes up, these systems will become more and more attractive as they outperform human intelligence. This can potentially form an issue in the future: volatility might increase and it is this volatility that provides many opportunities for traders, but not the necessary stability for producers and consumers which are more long-term focussed.

Therefore, in the future action is necessary toquality-efficiency-speed-cost restrict, or at least reduce, HFT. Examples might be big data collection by regulators to monitor risk and predict future flash crash or volatility events. Another option can be the introduction of a “minimum resting period” for trading. So traders have to hold on to their equity or trade for a pre-specified time before selling it on, reducing the frequency and thus volatility. Also, widening spreads will help as it makes quick selling and buying more costly and thus HFT less attractive.

Given that the financial market’s watchdogs currently have difficulties with regulating automated trading. Some HFT firms have enjoyed enormous profits from their trading strategies (Jump trading, Tower Research capital, DRW). For example also during the last turmoil of August this year, a couple of HFT firms earned a lot of money (Hope, 2015). Due to these successes, new players enter the market and competition is growing. As speed is essential (even milliseconds matter) HFT firms try to place their servers physically near the exchanges (such as the NYSE), so they can increase their advantage. The HFT firms are expected to stay in the market, ultimately resulting in more price volatility (Hope, 2015).

What do you think, how far should we let our technology intervene with the financial markets? Do we really need to allow algobot’s or similar automated trading systems to influence our financial markets as they can perform the human job faster, fact-based and at a lower cost? Or should the financial markets be always human intelligence based, which might be ultimately better for the economy as a whole and also provides a richer knowledge base of the real world economy (as it this information remains valuable and numbers do not always say everything)?

In case you are interested in this dilemma, I can also recommend reading Stiglitz’ speech at the Federal Reserve Bank of Atlanta in 2014.

Author: Glenn de Jong, 357570gj

Read More…

Prosper and Billguard changing the finance industry

Recently Prosper marketplace, one of the fasted growing tech companies in the U.S., has acquired BillGuard, which is one of the fastest growing finance apps in the U.S. Both companies are disturbing the traditional banking industry by peer-2-peer lending and by revolutionizing personal finance management services (Sawers, 2015). This acquisition intrigues me because interesting future developments can evolve from it.

First, let’s briefly get to know Prosper marketplace. The company is market leader in the peer-to-peer lending industry and provides cheap loans and good returns on investment by cutting out the middle-man (Prosper, 2009). Moreover, lending or borrowing money through Prosper is a significantly faster process than the usual processes in banks, which include a lot of wait times. More specifically, the ability to require online, day or night, investment or loans provides excellent customer services (Prosper, 2009). More so, the safety application and the risk assessment tools are painting a thorough understanding of the project investing in (Prosper, 2009). This has resulted in issuing over $2.5 billion in personal loans in the U.S. over the past six years (Prosper, 2009).


Billguard is also disrupting the traditional finance industry, not by providing an investment platform but by enabling customers to manage their personal finances. Yaron Samid and Raphael Ouzan founded the company in 2010 after having determined the need for more transparency in unauthorized credit card charges (Billguard, 2009). BillGuard is a free service that harnesses our collective vigilance to protect everyone from hidden charges, billing errors, misleading subscriptions, scams and fraud (Sawers, 2015). More specifically, the crowdsourcing application allows users to ‘flag’ false charges, which will be distributed throughout the community, providing valuable information about ghost-chargers. It is estimated that the average consumer is wrongfully charged for $300 a year of which they have no knowledge that could have easily been avoided by using Billguard. The company has currently over 1.3 million registered users, which have generated more than $70 million in unauthorized charges over the years (Sawers, 2015).


Acquiring Billguard Prosper enables itself by to provide recommended financial decision-making tools to its current customers. By combining historic data from both platforms and applying big data technologies, Prosper could deliver impressive financial recommendation and provide valuable insight to investors (Sawers, 2015). Moreover, a marketplace lending system and personal finance management has never been combined and has in my opinion the potential to truly empower, protect and educate customers globally.


Billguard, 2009. Company profile. [Online] Available at: [Accessed 2015].

Prosper, 2009. Prosper. [Online] Available at: [Accessed 2015].

Sawers, P., 2015. P2P lending platform Prosper Marketplace acquires personal finance-tracking startup BillGuard for $30M+. [Online] Available at: [Accessed 24 September 2015].

Should you be paid for the information on your Facebook profile?

In today’s online world everyone knows everything about you. Companies seem to know you better, than you know yourself. And for some reason all online platforms are allowed to track you all day, everywhere you go on the World Wide Web. This is the “dark side” of using free online social media platforms. But, what do those online platforms earn per profile, and shouldn’t the users that provide the companies with their profiles and information compensat their users

According to statistics from eMarketer, Facebook will earn $6.82 billion on digital display ad revenues that is just over one quarter of the total market. In the coming years this market share will continue to increase, reaching 26.9% by 2017. We are making Facebook more profitable each year, by providing them with the ideal platform for targeted marketing though our personal profiles.

Screen Shot 2015-09-27 at 09.11.38

The average Facebook user generated $12.76 in advertising this year, which will increase to $17.50 by 2017.  However, your value to social networks depends heavily on your location. An US user will add a total of $48.76 per profile to Facebook, whereas a European user will only add $7.71 value per profile.

Screen Shot 2015-09-27 at 09.30.32

Why will Facebook’s market share increase over the coming two years? Due to a growing marketplace for online advertisements on the demand-side and social media platforms finding out more ways to show ads to its’ users on the supply side. As social media users tend to provide the platforms with more and more information on their profiles, the ad spaces become more valuable. On the other hand, ad-revenue based companies develop new and innovative styles of adverts, increasing the willingness to pay from companies wanting to advertise through social media on such platforms.

Musician and Internet theorist Jaron Lanier told Channel 4 “for every piece of data we hand over to “spy agencies”, we should be compensated. The reason that monetizing information is crucial, it’s the only path that creates moderation. People talk about rights and regulation. My concern is that those things can never keep up with computer programmers. Programmers move faster than the law. But monetizing will do it.”

In my opinion we will not be able to stop ad-revenue based companies from gaining information about their users. As Jaron Lanier argued, programmers will always move faster than the law. It is impossible to stop the constant innovation in ad-revenue based products that social media platforms use to attract firms in using their platform for marketing purposes. In the future, I believe, such social media platforms will be the leading platforms for advertising purposes. Traditional ad purposes will be derived from the market, making it possible for the “big spy agencies” to gain a lot of power. With constant innovation, nor monetizing, nor law, will create a stop to your increasing “online worth” and the use of your personal information.

What do you think? Should we be compensated for the personal information we provide to “big spy agencies”, which they in turn use to generate billions of dollars in revenue?

Do you want to know your worth on the Internet? AVG has created the application PrivacyFix, an app that provides you with the information on how much you are worth to “big-time data players” such as Facebook and Google. For Facebook, the app uses publically available shareholder information to determine how much each user in that country is worth to the company. Furthermore, the app gives you insight on how is tracking you online.

Screen Shot 2015-09-27 at 09.30.48

Download the app via:

Author: Milou Saraber


Advertising is getting increasingly smarter…. and mobile.

Despite being so prevalent in our daily lives now, mobile phones continue to pose a challenge for advertisers to tackle. Mobile phone usage has surpassed desktop usage since 2014, and adults now (in the US) spend over 51% of their time online through mobile now – averaging 2.8 hours each day (1).  Forresters research suggests that 29 percent of all  online sales were generated from mobile in 2014, up 8 percent the year before. However, mobile advertising is still fragmented and has failed to find its home on our smartphones. So far this year, advertisers have spent $69 billion on mobile ads without much success in getting users to purchase on mobile devices. (2)

mobile ads

Quixey is approaching this challenge with a new lens: rather than displaying premade, targeted ads, they generate real time sales offers from different apps. An example of this would be if a user was browsing an article about a sports team, Quixey would display a real time offer for ticket sales from a variety of apps, even if the user hasn’t downloaded them. This real time, dynamic advertising has real potential to give users offers they care about since they are actively reading about them.

With the app economy booming like never before, this poses a great source for advertisers to extract the right data from within our phones to make the right kind of offer to us. To put it in perspective, there have been over 200 billion app downloads since 2008 from multiple app stores, 100 billion alone from 2013 (1).Google is working on similar technology (2) on what it calls app indexing, which it says looks inside apps and extracts useful information to generate ads.

While not the perfect answer to a difficult question, app extraction could very well be the way of the future for how we see those annoying offers pop up on our phones, however there may be a few good ones that make their way through.





Breaking up with your iPhone

I admit it: I am an iPhone addict. But while I’m writing this blog post I am looking at my roommates: one watching television while texting her hockey friend; the other one sitting on the stairs fighting with her boyfriend; and the last one studying, like me, while checking her iPhone every minute or so. The only one really focusing on what she is doing seems to be the one fighting…

Now I would like to ask you to think about this: how many times a day do you check your smartphone? To check how many likes you got on that picture you uploaded 15 minutes ago? Or who sent you a message over Whatsapp?

The age of the smartphone started in 2007, when Steve Jobs introduced the iPhone 1. His words, “This will change everything”, did not go in vain. Now, eight years down the line this invention did indeed change everything: from our personal lives to our interpersonal relationships; from the way we do business to the way we do our groceries. Our smartphone is interweaved in almost every aspect of our lives.

Although the introduction of the smartphone made our lives easier, more comfortable, and more safe in many ways there is also a shadow side: the growing smartphone addiction. Only in Europe more than 50% of the children between 9 and 16 reported overdependence related to their smartphone usage.

Mobile phone usage has been linked to (The Huffington Post, 2012):

  • Stress
  • Sleep deprivation
  • Symptoms of depression

In the report published by Net Children Go Mobile in 2014, almost three out of four children (72%) said to “feel they have to be always available to family and friends”. This social pressure might result into anxiety and stress for the younger generation. Also the “entrapment” of feeling you have to be available 24/7 and reply as soon as you read a message could increase the anxiety among these young children (Net Children Go Mobile, 2014).

It is interesting to see how those small technological devices can have such a substantial impact on our mental, and sometimes even physical, wellbeing. Many of us seem to have come to see them as an extension of who we are. How is it even possible there was a big connection between our heart rate and blood pressure surging when our phone is ringing across the room from us but we can’t reach it (Steinmetz, 2015)?

We are the first generation to grow up digitally native, while these developments show alarming facts about just us, our generation, growing up.

What do you think? Should we break up with our smartphones every once in a while…?

Mascheroni, G., & Cuman, A., (2014). Net Children Go Mobile: Final Report (with country fact sheets). Deliverables D6.4 and D5.2. Milano: Educatt.

Singer, M., (2014). Smartphone addiction among European kids – Market Business News. [online] Market Business News. Available at: [Accessed 26 Sep. 2015].

Steinmetz, K. (2015). Here’s How to Battle Your Smartphone Addiction. [online] Available at: [Accessed 26 Sep. 2015].

The Huffington Post, (2015). Heavy Technology Use Linked to Fatigue, Stress and Depression in Young Adults. [online] Available at: [Accessed 26 Sep. 2015].

The Internet of things: HomeKit

Generally speaking, the Internet of Things refers to the networked interconnection of everyday objects, which are often equipped with ubiquitous intelligence. The Internet of Things will increase the ubiquity of the Internet by integrating every object for interaction via embedded systems, which leads to a highly distributed network of devices communicating with human beings as well as other devices. Thanks to rapid advances in underlying technologies, Internet of Things is opening tremendous opportunities for a large number of novel applications that promise to improve the quality of our lives (Xia et al, 2012). Analysts at Gartner (2015) have forecasted that by the end of 2015 almost 5 billion ‘things’ are connected to the Internet. By the end of 2025 they expect that 25 billion ‘things’ will be connected to the Internet.

Companies are using and integrating the Internet of Things to create new customer experiences and attract more customers. One might argue that the Internet of Things is the future for companies nowadays.


Apple has recently released HomeKit. This is a framework for communicating with and controlling connected accessories in a user’s home. With this you can transform your home to a so-called ‘smart home’ or ‘connected home’. With the HomeKit application users can serve almost everything in their house, from the lighting to the locks to the heating system, it can all be arranged with one application.

HomeKit can be integrated by developers in (existing) applications and products. It does not matter who fabricated the domestic products, if the HomeKit software is integrated, they can all communicate with the HomeKit app. By doing this Apple resolves a huge practical problem. Before HomeKit, every single smart ‘thing’ communicated with it’s own application, which made it almost impossible to work together with other ‘things’.

Users can even use HomeKit with the help of Siri. They simply have to give spoken instructions to Siri and Siri will make sure that the lights will dim, or that the heating goes up. It is even possible to say what you are up to, and these smart devices instantly know what kind of settings you prefer. For example, if you say the words: “I am going to bed”, Siri will make sure that all the lights are off, the door is locked, and the heating is set lower.

The main benefit of HomeKit is that it provides one interface that you can use to serve every smart device in your home and even connect the different smart devices from different developers with each other. Until the launch of HomeKit this was not possible. I am very curious to see how this will develop even further due to the fact that Apple is already working together with the world’s largest producers of smart devices.


Xia, F., Yang, L. T., Wang, L., & Vinel, A. (2012). Internet of things. International Journal of Communication Systems, 25(9), 1101.

Technology of the week: Crowdfunding vs Crowdsourcing

The rise of Web 2.0 changed the web from a static portal to a dynamic workplace without physical barriers through which people across the world are able to connect and collaborate. This resulted in new business models and new ways to operate in order to achieve goals by using ‘the crowd’ as a main resource. This blogpost will compare two types of crowd usage (Crowdfunding & Crowdsourcing) through two electronic marketplace platforms (Kickstarter & Freelancer).Screen Shot 2015-09-28 at 11.50.21

Crowdfunding: Kickstarter
Using Kickstarter, business entrepreneurs are able to attract capital using the crowd as their main source of investment, called Crowdfunding. Entrepreneurs submit their ideas and the crowd can decide to ‘back’ these projects by donating money, sometimes in return for a finished product. Kickstarter earns its money by charging an average commission based fee of 5% on all successfully funded projects. The business model is fully driven by transaction volume. One of their success stories is the Pebble E-paper Watch. This project reached its 100.000 USD goal in just two hours, and eventually was pledged more than twenty times the expected amount (Jauregui, 2012).

Crowdsourcing: Freelancer
Crowdsourcing is mainly used for four main purposes: solving problems, generating ideas, designing logos/commercials/websites, and outsourcing human intelligence tasks. At the same time, people around the world are looking for work matching their specialisation (Boons, 2014). Freelancer created an online marketplace which connects these two sides and enabled online outsourcing. Their revenue model is subscription and commission based. Both project suppliers and freelancers need a paid subscription if they wish to participate in this electronic marketplace and the commission based fee is based on a fixed percentage of the value of every completed project. Today, Freelancer has over 16 million users and more than 8 million projects. This marketplace is expected to grow as the adoption of internet in low-wage countries increases.

Comparing Kickstarter & Freelancer
Comparing Kickstarter and Freelancer, we found mostly similarities. Both Kickstarter and Freelancer have the largest market share in their market, and do so by providing a hierarchy free marketplace (Malone, Yates, Benjamin, 1987) . They both exploit similar business models, based on fees and commissions, though Freelancer has more revenue streams due to the paid subscriptions. Furthermore, Kickstarter and Freelancer both exploit the absence of matured legislation and governance guidelines, limiting their responsibilities towards the crowd. But Kickstarter has shown its responsibility recently by becoming a Public Benefit Organisation (Kickstarter, 2015).  The main difference lies in the role of demand and supply, which are fundamentally different when comparing Crowdsourcing to Crowdfunding. Whereas in Crowdfunding the crowd solely offers funding, in Crowdsourcing the crowd is responsible for providing services.

Our predictions
Kickstarter and Freelancer are ever growing in size as crowdfunding and crowdsourcing are still rising in popularity. However, in the long run the growth of Crowdfunding is expected to reach a ceiling given that the yearly growth will start to decrease. Crowdsourcing is expected to keep on growing as the job market is an essential human need. Especially in the low-wage countries that are getting increasingly connected to the Internet. The most risky element which can potentially disturb the growth of both crowdfunding and crowdsourcing is the maturation of legislation and governance structures. Legislation will most likely shift the landscape of responsibilities regarding crowdfunding and crowdsourcing websites, which could have an impact on all crowd-based business models.

Jauregui, A. (2013) ‘Pebble iPhone Watch Is Highest Grossing Kickstarter Project Ever’. Accessed on 23 September 2015 through
Boons, M. (2014), Session 8: The Business Implications of Web 2.0 [PowerPoint slides], Retrieved from RSM
Malone, T.W., Yates, J., and Benjamin, R.I. (1987).
Electronic Markets and Electronic Hierarchies. Communications of the ACM 30(6) 484-497.
Strickler, Y., Chen, P., Adler, C. (2015). ‘Kickstarter is now a Benefit Corporation’. Accessed on 24 September 2015 through

Team 23
Hicham Gouiza 322226
Tony Jordan 400986
Kevin Schaap 358985
Jurgen Langbroek 336822
Glenn de Jong 357570

TOTW Team 26: Clicking instead of walking into markets: a comparison of Light in the Box and Etsy

The way of shopping has changed due to the rise of the Internet. These changes have brought new business opportunities, under which the emergence of e-commerce. E-commerce is not something retailers can ignore as it has set a firm foot in today’s digital environment, and it has characterized electronic markets. As the digital environment keeps on evolving, it is interesting to examine two companies to understand the innovative and creative elements that underlie e-commerce. Two companies that are relatable and have their similarities. However, although both were initiated as online marketplaces, they are distinctive enough to tap into their markets effectively. 

Both Light in the Box (LITB) and Etsy have focused their business model on catering the need for customization. These companies made the gap between manufacturer and buyer smaller. LITB offers attractive low prices for their products and good customer service with a far reach. Unlike LITB that is B2C, Etsy is C2C-focused and provides an online platform for individuals who sell and purchase unique handcrafted products with a strong customer service and customer education. Both founded within ten years; they have achieved a high presence in the markets that they are operating with both international and local competitors. One large similarity between these two companies is the power of the suppliers. In the case of LITB, collaborations with large suppliers are the central part of its business model. For Etsy, this is the case as well. However, the suppliers in Etsy’s case are individual crafters who offer their unique handmade goods. They are mainly dependent on their suppliers to execute their business model. One large dissimilarity between the two companies is their revenue model. For LITB, their main source of revenue is sales of their products, and for Etsy listing and sales fee will be collected for every listed and sold item. Due to this fact a second dissimilarity arrises as Etsy is more dependent on the performance of its sellers, whereas LITB is dependent on itself for selling products. This has led to a difference in customer focus where LITB offers more services to the end buyer, whereas Etsy focuses more on the sellers instead of the end buyers. 

As the digital environment is changing rapidly and very uncertain, both companies should keep on evolving their strengths that underlies their competitive advantage, and they should be open to opportunities for changes and innovations that will harbor growth. One opportunity for both companies is the potential of the Asian (Chinese) markets that is strongly characterized by e-commerce in recent years. Globalizing their business should go hand in hand with glocalization, where the needs of the local consumers are addressed. However on the other side of the coin, both companies should work on their weaknesses and potential threats to limit the chance of competitors using these weaknesses to their advantages. 

We are inviting you to join our discussion about the futures of these companies. What are your thoughts on both business models and their success in the future? Will LITB be more susceptible to losing their competitive advantage compared to Etsy, or is it the other way around?

The dark side of Personalized Search

One of the perks of the internet 2.0 is that we can benefit from heavily personalized internet use. Companies can tailor their products and advertising to target potential customers in a much better than before and the consumers get tailored search results, ads and product recommendations.

This blog post will focus on personalized Search.  Speretta and Gauch (2005) defined Personalized Search as search engines that give search results based on user profiles, description of user interest and cookies. In this way equal search queries may give different search results depending on which user is searching.

On first sight, this seems like an amazing feature, your search engine cuts through billions of pieces of information to get you exactly what you are looking for.

But is always getting what you are looking for not also a danger in itself? Are the things we want also the things we need? In a less serious case you might be looking for new music in a different genre then you normally listen to but your Search Engine hides these new artists and songs because it does not fit your profile.  In a more serious case, for example, elections are coming up and you are looking for a suitable candidate to pick on the topic of Renewable energy. For the sake of the argument, you have a neutral view on this, in previous elections you have voted  right wing which often have relatively conservative energy policies. So when researching the topic of Renewable energy you might get a very biased view as your profile seen as someone who is not pro-renewable energy.

Eli Pariser has coined this with the term ‘’Filter Bubble’’. He argues in his book ‘’Filter Bubble’’ (2012) that this Bubble we live in will hamper society’s progress due to people being uninformed or ignorant to current issues in the world. It may also cause the “truth” to be hidden for some people.

One can argue that personalized search defeats the purpose of the internet. The internet gives you the possibility to connect with the world and get to know things on a whole new level but the Filter Bubble might hamper this. On the other hand, in the pre-internet era people were only exposed to their own paradigms but during this time society still progressed significantly.

What do you think? Are Personalized Search results a blessing or a curse?





Speretta, M.; Gauch, S., “Personalized search based on user search histories,” in Web Intelligence, 2005. Proceedings. The 2005 IEEE/WIC/ACM International Conference on , vol., no., pp.622-628, 19-22 Sept. 2005

Pariser, E. (2012) Filter Bubble. London, United Kingdom. Penguin Books.

Technology of the Week: Electronic Markets and Auctions – Groupon vs. Google Offers

The existence of market places has taken its place in human society for as long as can be remembered. With the emergence of the Internet, its growing user base and the development of information technology electronic markets were created over time. Parallel to the rise of electronic markets, the digital coupon industry started growing which resulted in the evolution of the so-called “e-coupons” (Jung & Lee, 2010). Consequently, “Daily Deal” websites emerged, rising greatly in popularity due to its advantages of being an e-market. Groupon and Google Offers are two web services that operate in this market.

Groupon is a company that launched in 2008 and is now one of the most commonly-used, group-buying website that started off with offering daily deals regarding restaurants, beauty and wellness, shopping services and tickets all over the world. These offers were available for a limited amount of time and (sometimes) quantity.

Google Offers is a web service launched in 2011 that offers local deals of the day that were only valid for a specific amount of time. Additionally, Google Offers was imbedded in Google Maps, Places using Google Wallet as payment service.


Looking at both companies’ business models, various similarities concerning customer segments, value proposition, channels and revenue model were detected. However a disadvantage is that Google’s focus is not as singularly as Groupon is. By analyzing the SWOT of each company it can be concluded that both firms are adding value by applying the couponing technology to their platforms, offering the same kind of deals. Differences can be found in the extra services or information the firms provide through their website. Through Groupon more local cities are available, it allows users to set a certain distance range and one can see what other consumers are doing, also known as observational learning (Chen, 2011). In contrast to Groupon, a deal from Google Offers is valid regardless of how many people take it. Furthermore Google Offers is beneficial toward both merchants and customers, where Groupon is only lenient toward some consumers (Blodget, 2011; Moon, 2013).  Hereby, Googled Offers could expand its user base by incorporating Maps, Wallet and Places  which made the initial registration for Google Offers easier because of its link to other Google service, whereas Groupon used their social media platforms. Nevertheless, a combination of Groupon leading in market share, their customized services and focus proved to be too much to compete with. Google Offers choose to forfeit the market and abandoned the Google Offers project in the first quarter of 2014.

Future predictions

Rivalry among existing competitors is high in the electronic couponing market. Only through constant innovation, new services and aggressive marketing strategies will firms be able to compete within the industry. New technologies will allow even greater customization towards consumers, automated sales to companies and self-serve solutions that are necessary to stay ahead in this highly competitive environment.

Group 27:

Alje Dijkema (437581)

David Grabner (441485)

Dominique de Knecht (348165)

Alicia Kong (371764)

Victoria Blei (376328)


Blodget, H. (2011) Google Offers Revealed: Here Are The Secret Details About Google’s Groupon-Killer, Available from [Accessed: September 25, 2015]

Chen, Y., Wang, Q. and Xie, J. (2011), “Online Social Interactions: A Natural Experiment on Word of Mouth Versus Observational Learning”, Journal of Marketing Research, Vol. XLVIII April: pp. 238-254

Jung, K., & Lee, B. Y. (2010), “Online vs. offline coupon redemption behaviors”, The International Business & Economics Research Journal, 9 (12): pp. 23–36.

Moon, M. (2013) Google Offers now lets you clip coupons without paying in advance, Available from [Accessed: September 25, 2015]