I joined Jupiter Communications in 1999. In June 2000, the company was acquired by/merged with Media Metrix to become Jupiter Media Metrix. Later the company would not be allowed to merge with Nielsen//NetRatings, have parts sold off etc. etc. We tend to think of companies as having lives of their own and persisting - in fact in some way or another, Jupiter Communications had existed since 1986. But companies merge, change, and it is rare for one to exist for the length of an average human life. These tend to be some of the largest companies around who have survived, gobbling up lots of other companies as they have grown and evolved.

I found it funny to do a search for Jupiter Media Metrix and be directed to a LinkedIn page about the company, that had a mix of correct historical information and some strange new information about another firm:

J-M Manufacturing Company, Inc. produces plastic pipes, fittings, and tubing products for water, electricity, gas, and communication. It offers polyvinyl chloride and polyethylene products; and PVC pipes, PEX pipes, PE pipes, and PF frames.

Ooops kind of a mess there. Anyway, for large companies there is a survivorship bias naturally. According to this BusinessWeek article from a few years ago, “The average life expectancy of a multinational corporation-Fortune 500 or its equivalent-is between 40 and 50 years.” Those are the most successful companies - other things I’ve seen say average company age expectation in Europe and Japan is 12.5 years, and that I’m sure excludes micro-businesses that disappear before getting onto the radar screen in a formal way.

The notion of what a company is, of what the fundamental aggregated currency should be of human output, creativity and production, is going to change over the coming years immensely. I could easily see loose collections of independent contractors with working relationships fashioned on-the-fly - already it is possible to build businesses like this; so perhaps it is useful to draw the distinction between a business and a company. You don’t need a company, to build a business (and apparently some people try to prove that you don’t need a real business to start a company and raise money!).

Y Combinator’s FAQ page makes for interesting reading too… new ways of funding and supporting businesses, but even this is not different enough to what exists today. For now, the inflexibility of corporate and tax law in most jurisdictions and other bureaucracy is probably what will prevent any innovative new structures from growing and thriving — they still have to fall within the limitations of the current system. But time will lead to changes as it inevitably does.

So the multi-state Mega Millions jackpot will be up to $252 million or so on Wednesday. The odds of winning the jackpot are 1 in 175,711,536. But actually doing the analysis to figure out if it makes sense to buy a ticket needs to also take into account the chance of others winning based on the number of tickets sold for the drawing… here are further details. As they point out, they don’t typically give out the number of tickets sold as a statistic, but given that there were 1.9 million winners in the last drawing of lesser prizes, and it is said there is a 1 in 40 chance of winning, 80-90 million tickets seems fair. Also, if the jackpot went up from $207 million to $252 million expected this time, assuming 50% goes into prizes that’s about 45 x 2 = 90 million tickets ($1 each). So let’s say 90 million, so chances of someone winning are 90,000,000 / 175,711,536 = 51.22%.

Thus calculating the Poisson distribution, and using the cash payout instead of the overall jackpot we get:

W = $159.2 million x ( 1 - e ^(- 0.522)) / (0.522)

W= $124,582,387

So then we look at your expected prize winnings in relation to your chance of winning, which gives you (when you include the chance of winning one of the smaller prizes, which by the other estimate are around $0.20 for every $1 of tickets purchased, we get this:

$124,582,387 / 175,711,536 + 0.20 = 0.70901 + 0.20 = 0.90901 or …

For every $1 ticket you buy at this level, you can expect to make about $0.91 (today).

I have restarted this blog, and will use it both as a testing ground for blogging in general and using Wordpress in particular, and also to play around with and give voice to various ideas clanging around that don’t neatly fit into my day-to-day work at CPM Advisors (though it is quite likely there will be overlap/crossover since it is difficult to maintain any kind of separation mindwise when you are working in an online startup).

My posts will align around my interests in economics and finance especially behavioral economics, mathematics, computer science, psychology and many things inbetween - and I encourage discussion and interaction in the comments section, on twitter and elsewhere!