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Unformatted text preview: ook’s key resources for competitive advantage are network effects and switching costs.
These resources make it extremely difficult for copycat firms to steal market share from
Facebook. QU E S TI ONS AND E XE RC I S E S
1. What is the social graph? Why is Facebook’s social graph considered to be stronger than the
social graph created by the sites of its early competitors?
2. Does Facebook have to worry about copycat firms from the United States? I n overseas markets?
Why or why not? I f Facebook has a source (or sources) of competitive advantage, explain these.
I f it has no advantage, discuss why. 8.4 Facebook Feeds—Ebola for Data Flows L E A RN I N G OBJ E C T I V E S
1. Understand the concept of feeds, why users rebelled against Facebook feeds, and why users
eventually embraced this feature.
2. Recogniz e the role of feeds in viral promotions, catalyz ing innovation, and supporting rapid
organiz ing. While the authenticity and trust o f f ered by Facebo o k was critical, o f f ering News Feeds
co ncentrated and released value f ro m the so cial graph. With f eeds, each time a user perf o rms an
activity in Facebo o k—makes a f riend, uplo ads a picture, jo ins a gro up—the f eed blasts this
inf o rmatio n to all o f yo ur f riends in a reverse chro no lo gical list that sho ws up right when they next
lo g o n. An individual user’s activities are also listed o n their pro f ile. Get a new jo b, mo ve to a new
city, read a great article, have a pithy quo te—po st it to Facebo o k—the f eed picks it up, and the
wo rld o f yo ur Facebo o k f riends will get an update. Co rpo ratio ns lo ve f eeds, to o ! “Like” a f irm o n
Facebo o k and the f irm can po st messages to yo ur news f eed, where yo u can “Like” new messages
they send o ut, co mment o n them, and share the messages virally. Feeds are perhaps the linchpin o f Facebo o k’s ability to strengthen and deliver user value f ro m the
so cial graph, but f o r a brief perio d o f time it lo o ked like f eeds wo uld kill the co mpany. News Feeds
were launched o n September 5,...
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This document was uploaded on 01/31/2014.
- Winter '14