The big blog

First, we were told to “tweet.” Then, because we all have so much free time on our hands, we were expected to “retweet.” And now—brace yourselves—it’s time to “pretweet.”

If you’ve just thrown up your hands and decided to read no further, I don’t blame you.

But, if morbid curiosity has gotten the better of you, here’s the deal. Pretweeting is the oh-so-precious name being given to the devil-spawn convergence of two of our zeitgeist’s new-dawn darlings: Twitter and prediction markets.

Twitter, you already know about. Prediction markets, though, may be new to you. They’ve become a growing trend in the last few years, but they’ve actually been around for decades, in one form or another. Imagine a stock market in which the value of the assets being traded are tied to future events (for example, whether the next U.S. President will be a Democrat or Republican). Everyone buys and sells and trades based on their individual predictions. And then, like magic (the magic of the free market?), you have a kind of crowdsourced crystal ball, in which the current market prices can be interpreted as predictions of the probability of events. And the results, at least so far as the evidence shows, are at least as accurate as other ways of pooling participants to make predictions.

Now, because this is a fairly intriguing concept, and because it involves math and other kinds of sophisticated cogitation, you’re probably wondering, “What could this possibly have to do with Twitter?”

Well, because Twitter tracks all those sets of 140 characters (or less) that everyone is sending back and forth, it can easily tell you what terms are occurring most frequently; i.e., what’s a hot topic and what’s not. Lots of folks use these Twitter trends as a cultural barometer and a way to stay on top of emerging patterns. Wouldn’t your business like to know about the next big thing ahead of time?

Here, of course, is where prediction markets come in, because they’re all about…well…making predictions. And that’s precisely what pretweeting is—a prediction market for Twitter. People are invited to visit the pretweeting website and use virtual currency to buy specific words being used on Twitter. Words rise and fall in price based on market value, and the big winners are those who buy a trending topic before it trends. Of course, no one is winning real money—it’s all an experiment. But the idea is that pretweeting could help businesses pick the next big Twitter trend, and by extension, the next big cultural phenomenon.

Now, if only Twitter had a prediction market for its own demise. Because lots of people are wondering—How long is the lifeline on that particular palm?

(Photo: http://www.flickr.com/photos/mharrsch/ / CC BY-NC-SA 2.0)