Economists Help Tech Giants Untangle the Web

Susan Hall

My colleague Ann All wrote that much like the famous scene in "The Graduate" where a family friend tells Dustin Hoffman he should consider going into "plastics," the "next big job" can be summed up in a single word: statistics. And I wrote earlier about the need for people who can effectively use data analytics to move a business forward.

 

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Measuring the Business Impact of Effective Data

Improved data usability can have a huge impact on revenue.

Ann's post, however, unwittingly highlighted a related trend, the focus on this Mercury News story: that the big-gun tech companies increasingly rely on economists to sift through all that data. In fact, she quoted Hal Varian, Google's chief economist, who was featured in a New York Times article, saying:

I keep saying that the sexy job in the next 10 years will be statisticians. And I'm not kidding.

But economists? That's a far cry from the "dismal science" we expect from them.

 

It says Google has 10 economists, statisticians and other quantitative analysts under former UC-Berkeley economist Hal Varian and is looking to hire more. Yahoo has been among the most aggressive in wooing economists away from university work, but eBay, Amazon, Facebook, Microsoft and others are, too.

 


Economists are helping Yahoo in its quest to find tangible evidence that online ads prompt people to buy products in bricks-and-mortar stores. Yahoo chief economist Preston McAfee heads a team of seven Ph.D. economists and five game-theory/algorithmic scientists who work with software engineers to create products that are smart and savvy as well.

 

To explain the nature of the work, Varian is quoted as saying:

To match up buyers and sellers, you need to understand where the buyers are coming from and the sellers are working from.

And Harvard's Susan Athey, who is a consultant for Microsoft, said:

Economists have 'the ability to look at past data and predict what would happen if you change the game.'

So no wonder the tech giants are giddy that economists can help them figure out the vast online market. As Eric Brill, eBay's vice president of research, said:

What a lot of us are realizing more and more is that the ecosystem is much, much more complicated than what we had thought.


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