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?

Obviously the hope in prediction markets is that the users willing to pay for securities are those with better understanding of the subject, therefore increasing the value (probability) of their preferred outcome.  As with wikis, there is the potential that ill-informed users will distort the final product.  However, given the proven success rate of prediction markets as cited in the case, uninformed users do not seem to be drastically reducing the reliability of the predictions.  Insiders, as long as the motivation is not profit, increase the likelihood of an accurate prediction (were reward based on profit, insiders would have motivation to drive down the cost of securities they believed would win, thus skewing the prediction).

Social Networks

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

Social networks provide users a centralized, organized resource to get current (maybe) information about the people with whom they interact, as well as a vehicle for self-expression. 

On the more social side of things (MySpace, Facebook, Friendster), this allows users to maintain contact with friends and family they do not see on a regular basis, and to reach out to people they have entirely lost contact with.  They are provided with a personal website with the ability to easily post photographs, messages, and personal data, and a display of all their contacts. 

On the business side of things (LinkedIn), social networking is a more overt, formalized expression of an age-old phenomena.  People have always relied on their personal networks to gain information in their industry, seek jobs, seek employees, look for business opportunities, and so on.  LinkedIn will appeal more to people who want their contacts or information to be vetted, or who wish to appear more serious/academic/professional.

Quality Wikis

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

Wikipedia works because of the volume of user/authors.  Incorrect information is quickly overwhelmed by the mass of public knowledge.  Among millions and millions of users, there are certain to be 3 or 4 who possess the correct information and feel strongly enough about the subject to see that this information is made available.  This is enabled by 1) the relative ease of changing content and 2) Wikipedia’s registration of authors allowing them to weed out repeat mis-informers.

That said, on subjective items (politics, arts, etc) “high quality” is difficult to define.  These topics inspire strong enough opinions that people who disagree are motivated to continually change and revert articles to reflect their own point of view.  Wikipedia is best used as a resource for general, facutal information.

Blogs 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?

Internal blogs are a great knowledge sharing device across large organizations.  The audiece is limited to a trusted population, so the open sharing of ideas that the internet and web-based applications are good for is possible.  You can also assume an educated audience, with similar interests.  However, that very strength is also the weakness.  The user/audiece population is pre-screened and, to a certain extent, homogenous (i.e. all bank employees, or IT professionals, or consultants) so the point of view is somewhat limited.

External blogs, on the other hand, could create a good deal of customer good-will…the consumer may feel he/she has “inside information” and that the firm is an open and honest broker for sharing so much information.  It could be an excellent advertizing or PR tool.  The company would have to carefully police the blog content though, for errors or inappropriate content which could be damaging to the reputation of the firm.  As blogging became popular and the volume increased, this could become exceptionally arduous.

I think external blogs certainly make sense in an advertising capacity.  For instance, a company like Apple, which produces personal entertainment gadgets, or a game producer like EA, could allow their developers to blog about features and aspects of soon-to-be-released products.

Apple advantage

Apple will continue to be the market leader in mobile music technology. Having capitalized on its first-move advantage, Apple’s iPod is now not only a household name but in some instances a generic term for mp3 player. As multihoming is expensive (both in handheld devices and music, and in the opportunity cost of establishing libraries and playlists and the usage statistics that iTunes provides), few users are likely to switch platforms even as they upgrade their players. Due to the large quanitities of users, Apple’s iPhone has a greater number and higher quality of complimentary products available in the “app store” than any of its competitors. Additionally, the a la carte set-up has proven popular with customers.

Brightcove

Brightcove’s main strength is its position as an early mover in the internet TV market, which will benefit the firm as the medium lends itself to strong network effects and relatively high multi-homing costs for some segments of its network.  

Brightcove’s weaknesses are in its execution, not its concept.  Although the management clearly bought into the philosphy of serving the long tail, their initial focus on premium customers who required a great deal of customization weaked the company.    Also, the firm really only had the resources to court the publishers through its platform and failed to equally develop its consumers, advertisers, and affiliates.  The company is currently relying on CDN sales to generate most of its income, a precarious position in light of the expected decline of retail CDN rates, and projects its future earnings based on significant growth in advertising revenue, but has yet to realize that advertising growth.  With a competitor like Google, whose user, advertiser, AND content network is so strong, Brightcove will be unlikely to compete.  

I see this market as very similar to the Winner Takes All case from last week…although multihoming costs may not be that high, the strength of the network effects will result in  Google dominating the playing field.

Since the writing of the Electronic 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?

Online gaming has become the norm as even Nintendo (traditionally the least technologically advanced of the gaming consoles) has widespread use of the Wii’s online capabilities.  Gaming consoles have also moved into the role discussed briefly in the case as the home media center, enabling both internet access and movies in addition to games.  Social networking and internet-based communications platforms (such as twitter, blogs, and IM) have become mainstream, contributing to the consumer’s expectation of a socially-enabled entertainment system.  Online gaming fulfills many of the same functions as these networking sites, allowing a gamer to establish an identity, engage with peers, and keep track of new information, all within the framework of video gaming.

Since the publishing of this case, Netflix has entered the video on demand (VOD) market.  What is your analysis of how Netflix has attempted to update their business model with VOD?

 

Netflix was successful in its original model in seeking the custom of early adaptors of the DVD technology.  This allowed the firm to leverage a less expensive and increasingly efficient distribution scheme.  By pursuing VOD, Netflix is really continuing in the same vein.  Netflix will need to seek new partnering/sourcing agreements to resolve the content availability issue of OnDemand movies.  However, as internet sites like YouTube.com and Hulu.com drive consumers to expect immediate gratification in their entertainment, the movie/tv industry will likely become amenable to providing their products via VOD to retain viewers.  Netflix’s core competency, the recommendation system, will continue to differentiate its product from its competitors and will allow the company to transition to the new format as DVDs phase out.

1. How should ezboard update their business model to reach their revenue goals?

ezBoard should look to generate greater revenue from its advertising by selling advertising space on discussion boards based targeted to the audience (such as sporting goods on sports discussions).  Additionally, posters should be required to pay for accounts with varying levels of customization and profiling.

2. What services should they consider offering with the new Version 8.0 software?

ezBoard should look to increase the customization of their boards, adding features like photo, video, or document sharing.  These features can be used to differentiate price of accounts for administrators.

Hello world!

Welcome to WordPress.com. This is your first post. Edit or delete it and start blogging!