
Money for Nothing - simonsquiff
http://www.dansdata.com/gz146.htm 
======
llimllib
I actually used to write book arbitrage software, and this person has managed
to completely misunderstand it.

I'm not arguing here for its societal value, just that dan appears to have
misunderstood some fundamental bits about how it works.

> Robot 1 offers Book A for $10. It probably doesn't have it in stock, but it
> knows where it can buy it for, say, $9, drop-ship it to the customer without
> ever seeing the acutal product, and make a buck on the arbitrage. Robot 2
> notices this and lists the same book for $11, hoping to do the same thing.
> Robot 1 notices Robot 2's listing, doesn't know or care that Robot 2 is
> another arbitrage trader, and reprices its listing for the book to $12.
> Robot 2 notices this and goes to $13, and away we go.

This makes no sense; the fundamental rule of amazon bots is that consumers
buying used books almost always buy the _lowest-priced_ used book available.
So the bot war would send the price _down_ , not up.

Why in the world would bot 2 offer the book for $11? It would know that nobody
would buy it when there was one already listed for $10.

The silly-high-priced books that I saw when I was working for the book company
were rare long-tail books. One of the discoveries that many people have made
is that for rare books, whether or not you understand what the heck it is,
some % of them will get bought even if they're listed for _silly_ high prices.
Enough people will pay thousands of dollars (not an exaggeration) for a used
copy of a book that they can't find elsewhere that stocking the long tail of
books can in fact be very valuable.

That means that, when you find lots of rare books, your incentive is to throw
out some crazy-high price for each, because some % of them will, in fact, get
paid, making the whole enterprise worthwhile.

edit: Arbitrage on the same market Does Not Work, in my experience, and to
just claim that it does with no evidence doesn't make it any more likely to do
so.

~~~
sneak
> That means that, when you find lots of rare books, your incentive is to
> throw out some crazy-high price for each, because some % of them will, in
> fact, get paid, making the whole enterprise worthwhile.

Oh, so it's just like domain squatting. Got it.

~~~
llimllib
What is the correct value to sell a book for, when you know it's rare, and
know nothing else about it?

------
reverend_gonzo
I did something similar in the early 2000s. I sold public-domain books (as in
created by government agencies) as pdf on cd on eBay.

The cost varied between $1-$10 with $5 shipping, and would cost me $1.20 out
the door. I had everything automated with a robotic disc publisher/printer and
stamp printer that I would work maybe one hour a week and bring in a couple
hundred dollars each week.

It was definitely a great source of side income. The main market was people
who didn't search google, since they could take the title of the auction, put
it in google, and usually find the PDF right there.

There's still people doing the same out there but now the market's flooded and
there's much less profit margin available.

~~~
gamerdonkey
Depending on the size of the dataset, you may have been providing a valuable
service to those on dialup (however unwittingly). I remember how even a
download of 50-100MB would take dedication to keep everyone off the phone for
hours and pray that there were no interruptions upstream. Paying $10-15 for a
guaranteed CD of what I wanted would have been well within reason.

------
jonnathanson
Money laundering seems like an interesting explanation, but there are far
better and less risky ways to launder money. Cash businesses, or even bitcoin
are superior to "selling" an app that could be taken down at any time, that
requires credit cards on file to purchase, and whose transactions Apple or a
credit card company could freeze, reverse, or cancel at will.

It would be fairly trivial for Apple, in cooperation with a law enforcement
agency, to source the transactions, map the patterns, and triangulate to
likely points of origin. And it would probably arouse a lot of suspicion if an
app of such obviously bullshit quality suddenly started raking in millions of
dollars in sales -- thereby making sales of the app inefficient and risky as a
laundry-integration method.

I suppose the whole thing relies on iTunes gift cards and credits, rather than
credit cards, but why overcomplicate things beyond there? Buying and reselling
gift cards at a moderate discount would launder your money just fine, while
limiting your exposure to third-party risk.

Apropos of nothing, the dissection of the high-priced crapware reminded me of
"I Am Rich," the infamous and short-lived iOS app from 2008. It cost $999.99,
and all it did was display a glowing red gem and a tagline on your screen.
Evidently, at least eight to ten people bought a copy before Apple swung the
ban hammer.

~~~
CaptainZapp

      Apropos of nothing, the dissection of the high-priced crapware reminded me of "I Am Rich," the infamous and short-lived iOS app from 2008. It cost $999.99, and all it did was display a glowing red gem and a tagline on your screen. Evidently, at least eight to ten people bought a copy before Apple swung the ban hammer.
    

I never understood why Apple banned that application. There was no fraud
involved. The application did exactly what the description said it does (show
a glowing red gem for 999.99) and it didn't violate any of the (quite
arbitrary at that time) Apple app store policies, or requirements.

If you want to put your douchiness on display by paying so much cash for no
other reason than to yell out to the world that you can afford to throw 1000$
out of the window it shouldn't be up to Apple to put a stop to it.

I assume it was a matter of fear about bad publicity on Apple's side.
Nevertheless I thought pulling this app was one of their more innane
decisions.

Wikipedia has a brief entry on that app:

[http://en.wikipedia.org/wiki/I_Am_Rich](http://en.wikipedia.org/wiki/I_Am_Rich)

~~~
jonnathanson
The official explanation is that a few people complained to Apple that they'd
been "tricked" by the app. (Because somehow, paying $9.99 for a glowing gem is
a more rational purchase.)

There was nothing technically deceptive about the app or its marketing. It was
banned largely out of what I presume was a "broken window theory" approach to
store curation: let stupid apps live, and more stupid apps will show up. I am
not sure if I agree with the call that was made, but I understand the
rationale behind it.

~~~
hayksaakian
Iimperically this has had little effect on the quantity of stupid apps on the
store.

~~~
jonnathanson
Sure, but hindsight is 20/20\. Apple was making this call back in 2008, when
the app store was still really new, and a lot of developers were waiting in
the wings to see if it was going to be worth building for.

Navigating the quality/quantity straits was by no means an easy task back
then.

------
tool
"One explanation for this could be money laundering."

Reminds me of something a few months or so back (in 4chan/g/) when Samsung had
some sort of a campaign that gave it's users free android market credits. I
don't remember how you had to authenticate yourself, but it was easy to
fabricate and people did it multiple times over. As a result, people made
really bare android apps to buy from themselves to turn that credit into real
money.

~~~
RankingMember
"If you build it, he will [find a way to launder money with it]."

------
eli
I would assume it's purchased from stolen Apple IDs and/or credit cards. That
seems a whole lot more straightforward and likely than someone handing out
dirty money to a bunch of people with legit Apple accounts.

~~~
mittermayr
this sounds like a plausible approach, although I wonder for how long such a
run would work given that very soon, the seller account would be shutdown if
99% of purchases were made by credit cards reported stolen or accruing reverse
charges quickly. I could see that work briefly, but the seller account would
long be gone now, after a single run even, I'd assume.

unless, this is just nothing large at play, just a random dude stealing cards
here and there, less than 100k a year type of criminal activity.

~~~
eli
Maybe they aren't credit cards, but stolen iTunes gift cards (or legit gift
cards purchased with stolen credit cards).

I don't think it would work very well for a long time at a large volume. But
so what? Set up a new seller account and start over.

~~~
nhangen
Or legit gift cards purchased with cash

------
mortov
I think the issue here is this part :

"One explanation for this could be money laundering"

Selling some useless crap for stupid prices is one of the easiest laundering
techniques beloved of many people trying to account for a sudden influx of
wealth. Oh ? The suitcase of cash, well it's like this, I sold some old jeans,
my wrecked chevvy and a busted tennis raquet to some nameless guy down the
[pub|bowling alley|policemans annual ball] and he gave me like $250,000 in
this suitcase for them.

I'm sure some of these apps are people having a laugh and then getting an even
bigger laugh when someone actually pays the stupid price tag they put on.
However, at least some of this has a distinct whiff of laundry detergent and
it's always useful to have some schmucks innocently purchasing thrown in for
good measure to delay investigators as they follow dead ends to people with
more money than sense.

~~~
dlhavema
Dont you need a legit paper/electronic money trail to actually launder money?

~~~
nicholassmith
If you're doing it properly, then yeah having a paper trail to justify it
helps. Currently some of the drug dealers in the UK are using fixed odds
betting machines in betting shops, they put money in, make safeish bets, lose
some money, maybe win some then check out however much they've got and move
onto the next one. Keeps a trail as you're on CCTV doing something entirely
legitimate.

------
unicornporn
Robot book publishing is really interesting. I think it peaked sometime around
2010-2011 when a lot of "robot books" were available on Amazon. Read more:

[http://www.chrisrand.com/blog/2010/02/odd-tale-
alphascript-p...](http://www.chrisrand.com/blog/2010/02/odd-tale-alphascript-
publishing-betascript-publishing/)

~~~
mjn
Wikipedia had to go through a push around that time to excise any references
to such books from Wikipedia itself, because some had crept in, mostly by
unsuspecting users who believed they had found an actual third-party book on
an obscure subject, and didn't notice it was suspiciously similar to the
Wikipedia article. It defeats the purpose of citing sources, of course, if
Wikipedia "bootstraps" its own sources by citing print-outs of previous
versions of Wikipedia articles as the source.

This does leave a more subtle problem than literal printouts of Wikipedia
articles, which is harder to solve. Sometimes journalists and even scholars
consult a Wikipedia article for background, and then just repeat something
similar uncritically, without independently verifying whether the Wikipedia
article is correct. If the Wikipedia article then at some point ends up citing
that writing as a source, a hidden reference-loop is created, with Wikipedia
effectively "laundering" a self-reference (unintentionally) through a third
party repeating something they read on Wikipedia. (Not a phenomenon unique to
Wikipedia admittedly.)

~~~
JetSpiegel
Ironically, that is the thesis presented in
[http://xkcd.com/978/](http://xkcd.com/978/)

------
andrewingram
When I was building the search for a big ecommerce books site (approximately
20 million products), it was a nightmare trying to filter the print-on-demand
products. At the time they were creating new "publishers" on an almost weekly-
basis, we were constantly having to tweak our blacklists. The big problem was
caused by the titles of all these books being stuffed full of keywords, so for
almost any conceivable search they would show up quite prominently.

There were some technological solutions we implemented, but it was a major
annoyance all the same.

------
maerF0x0
Arbitrage adds market making value. Just like trading desks that make it so I
dont have to (physically) find a person who has apple shares in order to buy
some. By making a well (or better) run market, prices can converge to their
true value. The seller of the shares can potentially sell to more buyers,
therefore finding the highest price possible. The buyer can potentially buy
from more sellers therefore finding the lowest price possible. Between the two
we get the "most agreeable" pricing .

This is why selling CDs of free things on ebay converged down to the price of
a CD + Shipping . Similarly its why (at least for now) bitcoins ought to hang
out around the cost of electricity + the capital cost of ASICs ... If the
price is much lower, dont mine, if the price is much higher its cheaper to buy
electricity and ASICs than to buy bitcoins.

~~~
jjoonathan
I'd hazard a guess that everyone here understands how arbitrage is supposed to
work.

But how valuable is market making, really? Is it always a good thing that
"well-run" markets tend towards the extremes of having razor-thin producer
excess or razor-thin consumer excess? Because that's what seems to happen in
big/equilibrium markets. One party has a slightly stronger bargaining position
and the process of market-making teases that out and translates it into "one
person wins big, one person wins just-barely-more-than-nothing." In the
process, some of that excess winds up in the hands of middlemen, so to argue
that "it's a feature, not a bug" you have to show not only that the value of
driving one party's margins to 0 is positive, but that it exceeds the sum of
the value captured by middlemen in the process.

Sometimes we can throw up our hands and say "eh, you win some you lose some,"
but other times the result is so unspeakably horrific that this attitude goes
from "unproductive" to "evil." Example: labor markets. Is it a feature or a
bug that unskilled laborers don't manage to capture any of their producer
excess, and that the equilibrium wage would lie just north of what what was
required to make work preferable to starvation and homelessness (less,
actually, because some people will be willing to invest savings/debt/daddy's$$
in acquiring experience = differentiation = freedom from the crushing
competition)?

Look, I don't know of any system that I'm convinced is better. But that
doesn't make the market perfect, so let's not pretend that its shit doesn't
stink. In particular, is it possible to structure a market in some way to
split the excess? Are there any big/equilibrium markets people know of that we
could look to for inspiration?

------
mcguire
" _And, more importantly, you don 't contribute to the wealth of people whose
target market is 'the inattentive, ignorant, and preferably inebriated'._"

Hey, hey! Let's not get crazy.

If everyone did that, the first-world economy would disintegrate.

------
sdegutis
As someone who does not have a lot of money, this article's title intrigued
me. However, I was disappointed to discover that the article did not actually
provide ways to get money for nothing. Overall, I was overall not very
satisfied with the experience of reading this article, mostly because it did
not provide me with ways of obtaining money for nothing, even though the title
suggested it would. I would not recommend the article to anybody who is
seeking to find ways to obtain money for nothing, as the article does not
contain such information, and it would be a disappointment for them as well.

~~~
websitescenes
At least there is someone else here with a sense of humor! lol

~~~
sdegutis
My goal is to stay at exactly 800 karma. But I started going over a bit.

------
erichocean
OT, but related: One way to eliminate the lower price competitors is to "buy"
their stuff, but with a card that has no money/credit on it. It'll be 10 days
before Amazon allows the item to re-listed.

Had this happen to me three times in a row on the same item. Why do arbitrage
when you can simply nuke any lower-priced competition at no cost?

In my case, every other item for sale, regardless of seller, was at least $150
higher. (I eventually sold the item on Craigslist for cash.)

------
lurkinggrue
Now look at them yo-yo's that's the way you do it you code the app on the
iPhone store. That ain't workin' that's the way you do it Money for nothin'
and chicks for free

------
websitescenes
and chicks for free.

~~~
tempestn
Most of my childhood, I thought that line was "and checks for free". It made
perfect sense!

~~~
websitescenes
OMG you may be right. Now I'm not sure.

~~~
websitescenes
Nope. I was right. Just looked.

------
corresation
The money laundering hypothesis appears a lot, however I'm not sure I buy it
-- the complexity and cost of getting many people involved, with many accounts
and payment methods (themselves all tracked), all to then pay 30% to Apple on
top, seems like a very convoluted and inefficient method. Worse, the goal of
money laundering is to do it as subtly and legitimate-looking as possible, and
putting garbage apps at ridiculous prices doesn't seem to meet that
requirement.

It seems more likely that someone was trying to game the charts: Some
categories need surprisingly little revenue to top, and each of these apps
started at ridiculous prices, dropping to the normal $0.99 a month later. Some
very naive person may have thought "investing" in buying only a few copies of
their app (getting back 70% of it, or even more if they bought discounted
iTunes cards) would get them enough exposure that it would pay back (whether
through future purchases of the app, or as some sort of backstop to
demonstrate their excellence as an iOS developer, etc). This is, it's worth
noting, exactly how many books get on best seller charts, particularly in the
smaller-market, easily manipulated categories. ^1

Just as a point of reference, I implemented anti-money laundering systems for
a banking conglomerate, so I have been deeply involved in analyzing money
laundering schemes.

I should add that I would _love_ to make money for "nothing". To make the next
Flappy Bird. Don't we all? To be very negative about that has the unpleasant
stench of jealousy.

^1 -
[http://online.wsj.com/news/articles/SB1000142412788732386430...](http://online.wsj.com/news/articles/SB10001424127887323864304578316143623600544)

~~~
lucaspiller
> It seems more likely that someone was trying to game the charts: Some
> categories need surprisingly little revenue to top, and each of these apps
> started at ridiculous prices, dropping to the normal $0.99 a month later.

Hang on... so the top paid apps are based on revenue? I always assumed it was
based on the number of downloads.

~~~
Systemic33
Isn't there two paid top lists? Grossing; based on how much it earned, and
regular, just based on popularity with the requirement that its a paid app.

