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Mark Zuckerberg, CEO of Facebook, launched this concept and product in May 2007 ( see video). Some interesting facts that he provided were: 24 million active users, 100,000 new users being added each day, 60% of users were outside college, 50 million users by the end of the year and 40 billion page views per month. While these are astounding, his articulation of platform effects were even better. The new platform will allow third parties to launch applications that work well with facebook. On the day it was launched there were 65 companies and 80 applications. In a month, WSJ reports that there are 800 new services available for 27 million users. Fueling this growth is what Mark Zuckerberg calls the social graph. Because users use facebook to feed and nourish their social network, the system is able to capture this network via the communication patterns. This social graph acts as a filter for any new communication and gets better as users accept or reject suggestions. Face book uses this graph to provide news feeds and suggest applications for users. Developers of applications benefit by reaching relevant users. As Zuckerman put it.. the next generation of Adobe and Intuit will be launched on this social operating system.
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After much speculation, Yahoo! CEO Terry Semels resigned yesterday. In its head-to-head matchup with Google, Yahoo! lost. As a result, Terry Semels the deal making CEO is now being replaced by Jerry Yang the technologist. If Yahoo! has plans to continue the battle with Google, this is a step back. Given that Panama platform has not had the expected gains, the role of the technologist is not clear here. I think, as speculated by CNBC, we will see a deal that will involve one or more of the component parts of Yahoo!
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Apple has been in the news so much that many article about how they do it have appeared. I found the one on Economist.com to be a good read. The first lesson was very interesting because people assume that all their product innovations have come from within. As the article points out most of them have come from outside. The Apple touch is lies in orchestrating the ecosystem. The second lesson is paying attention to the user and not the technology. Other companies have done this. The apple touch is in introducing simplicity and ease of use to the design of the product. The third lesson was listening to the customer. The author says that Apple ignored feedback and went with their instinct. I would rephrase that and say that they paid attention to the future needs by listening to their potential customers. This allowed them to persist with the pod and iTunes idea. The final lesson is to fail wisely or make new mistakes. Steve Jobs had failed in his first attempt to introduce a next generation OS and iPhone. He took his lessons and applied them to the next version. I would add one to this list -- demand creation and supply management. Steve Jobs does a masterful job with his product demonstrations and keeps people guessing on what they will do next. To complement that, Apple is able to source its components from third parties and able to tie it all together in a manner that provides the consumer with the best experience.
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Over the weekend, Boston Globe and The Times ran articles on Google. The Globe piece emphasised the notion of third parties developing applications that work on the Google platform and how Google supports that using environments like Gears. The other piece focused on how Google tweaks the search algorithm to produce better results. What is amazing is that there are over 200 signals that Google uses to tune the search results. While it may seem like these two strategies are contradictory, they are highly interrelated. Relevance is very important in providing high quality search results. In order to tweak its search algorithms, Google needs more and more user/usage data. This data comes from both the search queries and from using Google products like Gmail, Orkut, GoogleMaps and others. To keep developing useful products, Google is contantly testing multiple products in parallel. It is impossible for Google to develop all of them internally. As a result, they make it easy (by providing APIs and development environments like Geas) for third parties to create new applications but capture the data on usage.
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In a recent post on his blog, my colleague Venkat wrote about network-centric strategy and the role of a platform architect. Connectivity via the Internet has created opportunities to engage other customers, complementors and even competitors. This has led to the creation of ecosystems and new roles that companies can play within them. Platform architect is one such role. What other roles can one play in this landscape? While the role of a platform architect is a great outcome, it is hard to accomplish and clearly not the only one. One could choose to be a module or component provider that preferentially attaches to a platform to compete. The platform could provide access (via a standard) to other services that satisfy a customer need. The third role is that of a systems integrator (SI). While the platform and module provider create optional and core services, an SI could help customers choose and integrate these services. The final role we see is that of a process orchestrator. Entities playing this role ensure that, by weaving together services, the transaction of the business is completed and when failure occurs they can recover from it. In addition to these roles, how can one measure and exercise control within the ecosystem. In our research we have outlined a methodology to capture data on ecosystems and described some network measures to track progress. We have also described a concept called architectural control that helps companies create strategies to being relevant in industries characterized by platform-based competition.
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I was recently reading an article on WSJ that provided a link to this conference. On that website there is a video of a joint interview of Bill Gates and Steve Jobs. When asked about what they learned by watching the other, the answers were telling. Bill G. wanted Steve's taste. In particular, he liked how Steve made engineering decisions based on people and product issues. Steve on the other hand would have liked Apple to have MSFT's partnering or ecosystem strategy in his company's DNA. I guess there is no better way to put their differention strategy into words.
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