Saturday, January 19, 2008

Operation Potent Wind Progress Report

Operation Potent Wind is designed to introduce two new effects on the Blogshares economy: an increase in blog values, and more variation in value among the various blogs. The first phase involves elimination of one of the game's oldest features, a B$ 25,000 cap on outgoing link values. In the graph below, you can see that the distribution of blog values follows a power law between B$ 0 and 25,000, but then ends at the original limit. (click on the graphs for larger versions)

Our first step toward eliminating the cap was to double it to B$ 50K. We decided that this would be healthier for the game than simply letting things float, as it would give players time to adjust to the new conditions. The chart below shows the end state distribution after this change -- about 75% of the formerly capped blogs were now at their "natural" state.

At this point, we had originally planned to implement a new algorithm for blog link value, and eliminate the cap, but I felt there was additional value to be gained in stretching out the transition. The next chart shows the impact on outgoing link values seen from increasing the limit to B$ 100K - we get even closer to a true power law, but it's possible there is still more room for improvement.

Looking at the 700 or so blogs stuck at the outgoing link limit, we can see that over half have no outgoing links, and only 112 have more than a single outbound link. This means that we are probably at the point of diminishing returns, and don't need another step in outgoing link value before moving on to Phase 2.

One final chart in this post - the daily valuation of the total blogs market since we started Potent Wind. For the first week or so of Phase 1, you can see a generally stable trend, followed by a huge leap on January 6th. In the early part of the project, we allowed blog values to propagate naturally as players indexed their blogs. This effort concentrated on the few hundreds of blogs with the most value, and gave us a relatively stable market value for the first time in recent memory.

On January 6th, we fed the remaining capped blogs directly into the spiders, and realized a huge leap in overall blog value. We then let things settle for another week, and raised the cap again. You can see from the chart that blog valuation appears to be accelerating upward, with a glitch on January 1th caused by the elimination of a top-5 blog from the game.

Our next step will be to introduce the new algorithm for outgoing link values. We will be removing the limits, and players should see a whole new class of blogs grow in value.

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