Let’s talk about AT&T proposal to merge with T-Mobile. Why do the parties involved still consider this merger viable? Executives at AT&T seemed to think this merger was a good idea many months ago. For all I know, that might have been the right conclusion with the information they had then. But that was then, …
Continue reading "Puzzling over Big Wireless Carrier Mergers: An Editorial"
Firms in the smartphone market have been suing one another over patent violations. I cannot recall any other platform war that involved as many intellectual property disputes. Look, society grants patents as part of trade-off. A patent enhances the incentives to generate new invention by giving the inventor a temporary monopoly. That trade-off should never …
Not too long ago, there was a relatively long list of things machines couldn't do by themselves: play chess, read legal briefs, translate poetry, vacuum floors, drive cars, etc. But that list is getting shorter and shorter every year. The latest casualty may be writing newspaper articles. Kris Hammond and Larry Birnbaum at Northwestern's Intelligent Information …
Have you suspected for some time that most writing about sporting events is formulaic? Well, suspect no more! It is possible to have a computer write a sports story merely from the box score. No seriously. It is. And there is some pretty interesting business economics in that example. Some professors from Northwestern figured out …
Economics rarely improves with reference to etymology, but an exception should be made for the economics of networks. Many valid but distinct definitions of “network economics” compete for attention. That causes confusion in academic writing and in public discourse. There are many symptoms of this confusion. Consider this one. When the late Senator Ted Stevens …
Today, Google announced that it had acquired Zagat, the popular restaurant ratings provider. It's an important move, more for what it tells us about Google and the evolution of its strategy than it does about the restaurant rating game. Let's step back and consider the previous narrative on Google and Zagat. Zagat rose to prominence by providing …
Continue reading "Google buys Zagat. Thinks outside the algorithm"
Netflix is the textbook case of a disruptive innovation. Initially, it recognized and solved the "travel problem" in DVD rentals but sacrificed immediacy (subscribers had to wait for their DVDs to arrive in the mail). Improvements in broadband penetration throughout the U.S. have helped the company move into online streaming. Now consumers could not only remain …
Continue reading "Netflix and the perils of disruptive platforms"
For the second time, Steve Jobs will move away from running the company he cofounded, Apple. If history is any judge, this won't go well for the company. But there are lots of reasons to think history will be a poor judge of Apple's future performance. Let's start with some similarities between this departure and …
Innovators who build platforms face a difficult set of trade-offs. To begin with, the very definition of a platform requires buy-in from others — and not simply from the consumers you hope will purchase your product. The consumers and suppliers of complementary products need to make real investments too, investments that will enhance the overall value of …
Continue reading "How Twitter, Google and Apple walk a fine line in platform defense"
What problem does Google+ solve for consumers? The answer appears to be: nothing. And, therefore, it solves nothing for Google either. As with many of these social launches — an exception being the ill-fated Google Buzz — the launch of Google+ was limited. Like Gmail and Google Wave, Google relied on invites to scale initial users and …
