The Changing Face of the Information Business

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In the video below, Michael Saylor, CEO and founder of MicroStrategy and author of The Mobile Wave, visits The Motley Fool to discuss tech, business, and social trends as they relate to investors today.

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Michael Saylor: We created a system called Wisdom. The idea was born on the epiphany that I realized Facebook is going to be a universal consumer database, and it's going to have more data than anybody in the history of the world, and it's going to be interesting to everybody on Earth.

I thought, "Why not just build a universal market database that's got that in it?" We created a gateway that slurps all the stuff out of Facebook into a data warehouse and formats it so you can ask questions like, "Where are all the rich teenagers in the world that like Ferraris and also like soccer, that want to travel to France next year?" Any kind of intelligence question.

Then we created a standard application on top of it. We gave that application away to 100,000 people for free. Each person gave us a tokenized permission to grab all their friends' data and dump it into an anonymous database. It's a collective intelligence application.

It adds 50,000 people a day. We have 17 million profiles in the system right now. After a while, it got the attention of Facebook, so they adopted that technology internally, then they started adapting it to show the value of their advertising inventory.

We can pretty much psychographically, demographically, and geographically profile everything on Earth. For example, the next version of our software, you'll be able to look at the average age and income level of everybody in every bar, everywhere in the world.

You get up on a Tuesday and you say, "Where are all the pet lovers hanging out? Where are all the girls? Where are all the guys? What neighborhood do all the married couples live in?" All these things are questions you can basically drop right onto a Google Maps type profile in a matter of seconds.

I can tell you the 10 most popular celebrity athletes with teenage girls in Denmark in 10 seconds. If you pull Wisdom, we actually reproduced the presidential polls down to the state level to predict the electoral college counts. The product dragged 750,000 profiles out of the system. The average poll is 1,000 to 2,000 people to be statistically significant, so we are pulling more data than they could.

Our poll came out with Obama slightly ahead, and we ended up within the same confidence bounds as the other polls; the same margin of error. They spent hundreds of millions of dollars to do those things, and we generated ours with a variable cost of $0.30.

That's not the important point. The important point is, we did it to show that you can compare any two brands, any two celebrities, any two politicians, any two ideas, in 30 seconds for a variable cost of $0.30. That's an interesting observation, meaning a small retailer next year will have more intelligence at their fingertips than Wal-Mart had two years ago.

You could spend $500 million a year circa 2009, and you wouldn't be as smart as if you spent $5,000 in 2013. That's just how the intelligence world is changing.

We take that Facebook data, we join it with Google data, with Wikipedia data, with Apple data, with government databases, clean it, deduplicate it, turn it around and then offer that as a service.

The article The Changing Face of the Information Business originally appeared on Fool.com.

Eric Bleeker has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Facebook, and Google and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Apple, Facebook, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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