Google Prediction Markets

Is it a good idea to encourage ALL employees to trade in these markets?  Should insiders and/or highly uninformed people be allowed to trade?  Do they help or hurt the market?

I think it ultimately is a good idea to encourage all employees to trade in the prediction markets.  The data seems to indicate that the larger the pool of participants, the greater accuracy.  By encouraging all employees to trade in the markets, you are probably creating a market that has more inside information than a normal stock market may have.  Of course there will be people with inside information, and there will be people who make unintellegent decisions as well, but I think that with a large enough base of users, these two groups will cancel each other out.  So, I beleive that all employees should be encouraged to trade since the sway of the “informed” and “misinformed” should cancel out.  Having said that, I think that these types of markets could only work in certain types of businesses.

Threadless Case

In what other industries or areas would Threadless’ community-driven product development model work well?  And not so well?

I think this type of community-driven product development model might work well in industries or areas where there isn’t a lot of complex engineering that goes into the product.  With t-shirts, the supplies are low cost and printing the design doesn’t cost much at all either.  The value of the product comes from the cleverness or originality of the design.  This might translate well into areas such as cell phone covers, posters, hats, stationary, etc.  All of these types of products are low-cost basic design, but the value of the product in the end would come from what is printed on them; the creativity of the designer.  These seem to be “trendy” type of products that might sell in an urban outfitter type of store where it’s not so much the piece of clothing you’re wearing, but what is printed on it.

Areas where this type of model might not work would be such products as cell phone makers, television makers, car makers, etc.  All these products take a lot to be engineered and the costs are high.  They are more engineered with the function in mind and don’t have a lot of leeway in how the product can be changed to look different.  The costs of producing different-looking or different-shaped products is very high and would not work well with this type of model.

LinkedIn & Friendster

Online social networks have become ubiquitous over the past few years.  What form of value to users get from these services and who is most likely to sign up for LinkedIn versus other sites?

Users get several forms of value from online social networks.  Probably the largest value is reconnecting with old friends.  With so many users, many people enjoy reconnecting with friends on social networks.  Another value users get from social networking sites is being able to customize their pages.  People can show pictures, show updates about their career, and show current contact information.  Showing pictures of sports teams, alumni affiliations, and music allow people to express themselves. One other value users get from these sites is being able to plan “offline” events.  People can invite others to events or let people know what they’re doing over the weekend and others will look to see what they’re up to.

People who are more likely to sign up for LinkedIn are those people who are looking for a more professional type of social network.  LinkedIn is more career orientated and more about making work contacts and pursuing career opportunities.  The type of people who might be more inclined to join LinkedIn might be recruiters, HR employees, headhunters, and generally anyone who would want to have more options when it comes to looking for a new job.

Wikipedia

How do Wikipedia’s processes for creating and modifying articles ever lead to high-quality results?

Wikipedia produces high-quality, accurate articles because its users care about the accuracy.  Since all users (that are registered) are able to post, edit, and delete other articles, one might think people’s opinions or inaccurate information would be prevalent throughout Wikipedia.  This doesn’t happen because the vast majority of users need the site to be accurate and unbiased.  If someone posts a crappy article, it will be deleted quickly.  If you take the time to write a quality article and show your sources, it might be debated or modified, but should end up staying posted.  The fact the millions of articles have been posted and the amount of traffic show that Wikipedia is seen as an accurate encyclopedia.  The more people that use the site, the more people may contribute content, and the more articles will be read.  This ensures that bad or biased articles will be weeded out and good articles will remain.

One issue that wasn’t really talked about in the Wikipedia case had to do with their business plan.  How does Wikipedia make money?  There aren’t any adverstisements on the website and the case only mentioned that “Wikimedia” was used for income.  It’s apparent millions of people use Wikipedia, but as far as a business goes, is Wikipedia making money?  If so, what are their revenue streams?

Blogging at DrKW

What are the advantages and disadvantages of implementing internal versus external employee blogs in a corporate setting?  Are there certain industries where one of these strategies makes more sense?

As far as internal employee blogs, some advantages might be that it promotes the flow of ideas and best practices in a structured setting.  Employees who work together, or on opposite ends or different departments of the company, could discuss ideas about the service or product they sell and how it could be improved.  By using an internal company blog, employees can discuss more sensitive issues without worrying that competitors or others would catch wind of it.  On the other hand, internal company blogs have a limited user base and end users (customers) wouldn’t have any input.  Also, someone might be hesitant to post a blog that is critical of the company, even though it might lead to better improvements.

External employee blogs would have a broader user base that could include many more perspectives.  I feel as though employees and customers would be more inclined to give honest input with an external blog which could lead to many more improvements and corrections.  The disadvantage of an external blog is that it is public, so sensitive information wouldn’t be discussed (or if it did, it would be a problem).  External blogs are also have a higher risk for negative feedback and publicity since there is less control.

I would think that companies that need customer feedback would use more external blogs and companies that need to discuss confidential information would use internal blogs.  An external blog might be useful for a company that does repairs.  If they were stumped on how to fix something, they might be able to get help from outside the company if they were able to post  a blog with the problem.

iPod vs. Cell Phone

Has the digital music market irreversibly tipped in Apple’s favor?

I believe that the digital music market has tipped in Apple’s favor for the short-term.  They are the dominant online music store right now and as long as they keep producing iPod and iPhones, they will continue to be the market leader.  The fact that the music industry basically supports iTune’s setup should allow Apple to dominate for the foreseeable future.  Competitors like Google, Yahoo or Microsoft may attempt to copy iTunes and create other music players and cell phones may chip away at Apple’s market share, but I don’t see anything significantly challenging iTunes in the near future.  Over the last few years, Apple has continued to come out with new and updated products every year and being the first mover, they should retain the majority of their consumers.

The only two ways I see anyone challenging iTunes and Apple in digital music is if someone starts offering music cheaper than iTunes, or with some big technology change similar to digital music that allowed Apple to launch iTunes.  If a competitor started selling music for a decent amount less than iTunes, I believe they could pry a significant amount of users away from itunes as long as they offered products (digital music players) of equal value as the iPod or iPhone.  They would have to do this by taking a loss on the songs they sold in hopes they would sell more related products.  Or they could possibly sell the music for free, paying the music industry through some other means.  A large leap in technology could also change the dominance of Apple.  Say a new technology came out that allowed people to record or share music in a different way than the MP3, the market could yet again shift to another first mover’s favor.  Another scenario that may occur would be that the music industry creates a new channel for selling their music outside of iTunes.  These scenarios may be a little far-fetched because of Apple’s current dominance and their likelihood to continue to dominate the digital music industry for the next few years at least.

Brightcove

What are the strengths and weaknesses of Brightcove’s business model?

I believe Brightcove’s business model has several strengths.  First, by positioning themselves as a four-sided media business that included publisheres, advertisers, affiliates, and consumers, Brightcove has certainly created many potential sources of income.  They already used usage-based fee plans for publishers, but were looking to shift to more of a revenue-sharing plan.  With advertisers, they were taking advantage of the higher advertising rates compared to television and were using their AdNet to target large ad accounts.  Brightcove also allowed affiliates to syndicate content and would collect some of the profit from advertising and pay-media models.  By giving consumers the products they wanted, they could potentially allow consumers to post, rate and request their own videos and increase the number of users.  Another strenth of Brightcove is it’s focus on the long tail.  By capturing a lot of independent and smaller publishers, they can cater to people who are looking for content from the vast amount of smaller and independent providers.  Brightcove also is in a position to be the first mover, with no real threat from competitors.

There are also several weaknesses with Brightcove’s business model.  By attempting to target publishers, advertisers, affiliates and consumers all at once, they may be stretching their resources too thin.  One of those targets may be overtaken by a company that focuses their resources only on one.  Brightcove also must be careful as they attempt to become a consumer destination, as the larger publishers may become annoyed if customers start going to Brightcove to find videos instead of going to Brightcove to find their videos.  It is also apparent that Brightcove will need more resources to expand globally.  They will need more employees, staff and engineers to expand to other parts of the world and seem to have a limited amount of funds.  If they follow the words of their founder and place “multiple bets” testing the marketplace in several places, they may find out they have spent all their money before they find or develop a real sustainable strategic advantage in the fast moving industry of online video.

Google

Is search a winner-take-all business?

I don’t think that search is a winner-take-all business.  In a winner take all industry, it usually involves new technology which a dominant player can enter with a quality product and monopolize the industry.  They normally make switching costs high and try to gain network users.  The problem with search is that it has been around for a while and there are several players in the business.  The current methods of using algorithms is working for Google, but there may be new technology created on how to search, which could turn the search industry upside down.  The homing costs are low and search platform structure is multi-homing – many people use several search engines.  It is free to switch between or use several search engines at once.  While it may seem that Google currently is far and away the leader as far as searches go, I do not believe they are the clear winner in the search business in the long term.  Because it is free to use search engines and switch between search engines, I don’t think this industry is a winner-take-all business in the long run.  There is too much room for switching and there is always the possibility of creating new search technologies.

DoCoMo Case

Is DoCoMo wise to offer its exhisting mobile phone rivals access to FeliCa?

This depends on whether DoCoMo will make more money by exclusively keeping FeliCa and betting that it will be able to make money by attracting enough customers to pay for their service, or if they will offer FeliCa to it’s rivals and bet that they by having more FeliCa users, it will become the dominate technology and will be able to make more money that way.  If they don’t allow rivals access to FeliCa technology, they could have exclusive rights and would be the only ones to use FeliCa.  They would probably be able to charge more, having a monopoly on the technology, and would be able to dictate pricing without any worry of competitors reactions.  

On the other hand, if they don’t allow others to use the technology, they are limiting the number of customers.  This could limit the number of vendors that would use this technology, thus creating a smaller network of companies that choose to use that technology.  By keeping exclusive rights to FeliCa technology, they only increase the odds that another company will develop a similar, if not better, technology.  If they do allow others to use FeliCa, they will increase the number of users and increase the probability that the FeliCa technology will be the dominant technology for years to come.  This will only benefit DoCoMo as they have a stake in FeliCa Networks and will have access to new FeliCa technology.

EA in Online Gaming

Since the writing of the Electronics Arts case the Sony Playstation 3 and the Nintendo Wii have been released and both have online gaming capabilities.  What’s your assessment of the current online gaming market?

I think the current online gaming market has experienced large growth since the case was written.  Much of this growth seems to have been in the online computer games with the rise of World of Warcraft and the like.  I do believe gaming consoles have to include online capabilities to compete in the current market.  There are still games for each system that can and are meant to be played by yourself, but the majority of games coming out still are sports/action/roleplaying games that usually are played with multiple players.  The convenience and sociability of playing online games isn’t going to go away, so I don’t see gaming systems dropping that feature.  

With the ability to randomly play against or team up with strangers from all over the world, online gaming has really turned into its own sort of large social networking system.  People are making connections and creating groups of friends that can regularly play together.  With the expansion and increase in online gaming, several issues have arisen that couldn’t have been thought of several years back.  For instance, having worked at a law firm the last six years, I’ve heard of many new legal cases involving online gaming.  One had to do with people paying for online money and people “selling” their stronger, more experienced characters for actual money.  Another case involved a couple who played an online simulation game like Second Life.  The husband “cheated” on his wife with his online character and she was filing for divorce in real life.  

While the last case is a bit out there, it emphasizes the influence online gaming has gained over the last few years.  It goes to show that online gaming will most likely be here for a long time as it offers gamers social interaction while not leaving their home.  While I have no doubt much of the online gaming population still has its fair share of the stereotypical nerdy IT guys, there certainly has been much more acceptance in the general public.  Many more “non-traditional” players (women, older people) have taken up online gaming which has only added to the demand for online gaming and increased the overall market size.