B sto ne and m helf t in develo ping co untries web

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Unformatted text preview: isks suppo rting ef f o rts that undermine the f irm’s two mo st co mpelling so urces o f co mpetitive advantage: netwo rk ef f ects and switching co sts. Any ef f o rt that makes it easier to pack up yo ur “so cial self ” and mo ve it elsewhere risks undermining vital co mpetitive reso urces advantages (it still remains mo re dif f icult to expo rt co ntacts, e-mails, pho to s, and video f ro m Facebo o k than it do es f ro m sites suppo rting OpenSo cial, a rival platf o rm backed by Go o gle and suppo rted by many o f Facebo o k’s co mpetito rs).F. Vo gelstein, “The Great Wall o f Facebo o k,” Wired, July 2009. This situatio n also puts mo re pressure o n Facebo o k to behave. Lo wer tho se switching co sts at a time when users are disgusted with f irm behavio r, and it’s no t inco nceivable that a sizable chunk o f the po pulatio n co uld bo lt f o r a new rival (to Facebo o k’s credit, the site also reached o ut to prio r critics like Mo veOn.o rg, sho wing Facebo o k’s data-sharing f eatures and so liciting input mo nths bef o re their o f f icial release). Alo ng with asset weakening co mes the issue o f revenue sharing. As mentio ned earlier, ho sting co ntent (especially pho to s and rich media) is a very expensive pro po sitio n. What incentive do es a site have to sto re data if it will just be sent to a third-party site that will run ads aro und this co ntent and no t share the take? To o much data po rtability presents a f ree rider problem where f irms mo o ch o f f Facebo o k’s inf rastructure witho ut o f f ering much in return. Co nsider services like TweetDeck (no w o wned by Twitter). The f ree applicatio n allo ws users to access their Facebo o k f eeds and po st status updates—alo ngside Twitter updates and mo re—all f ro m o ne interf ace. Co o l f o r the user, but bad f o r Facebo o k, since each TweetDeck use means Facebo o k users are “o f f -site,” no t lo o king at ads, and hence no t helping Zuckerberg & Co . earn revenue. It’s as if the site has enco uraged the equ...
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This document was uploaded on 01/31/2014.

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