Tuesday, March 29, 2011

Social media

In general, how should organizations deal with issues posed by user-generated content and other information spread over social media?

Today, social media has significant impact on organizations. One individual transaction with one customer can be known to millions of people around the world and change organizations in a positive or negative way in several aspects: reputation, finance, and even their own organization cultures.

Organizations should deal with these issues in various forefronts:
- Be aware of the power of user-generated content and information spread over social media. It's hard to accept the fact that organizations do not completely control messages that are delivered to the public anymore.
- Overhaul organization cultures for internal deficiencies or weaknesses and improve or transform organization cultures. Sooner or later, they will need to provide a place to have direct 2-way contact with customers and when time comes, they can mitigate risks of getting too many negative feedback or backfire.
- Provide a means via social application technologies for customers and employees to get involved in organization activities: from ideas to implementation to feedback.
- Have resources dedicated to the social application and be proactive in delivering organization messages via announcements, blogs, and programs. When issues emerge, resolve as quickly and appropriately as possible.
- Be creative in getting customers involved and tolerant with necessary changes both external and internal.

Tuesday, March 22, 2011


How do network effects (cross-side and same-side) impact Hulu’s business model?

Hulu has three major groups of customers: content owners, users, and advertisers, who have strong network effects towards one another.

Content owners:
There's a Penguin Problem here since this is a relatively new market and therefore, the uncertainty is high and each individual content owner has their own long-term expectations. 
No-one moves unless everyone moves. 
Same-side impact
- The more content owners, especially those of popular content, join Hulu, the more likely others will join. The more owners join, the better for Hulu brand. That's why Hulu invested in a "long courting process" for Disney to join and offered Disney a stake of about 30%, similar to that of the founding partners because Disney was a reluctant but very influential player that can bring significant benefits to Hulu network.
- The more content owners join Hulu, the less power they have on Hulu since Hulu will not depend on just a few owners.
Cross-side impact: 
- If owners of popular content do not join the network, fewer users will visit Hulu and the network growth will stall and may drive Hulu to failures. On the contrary, with many popular content providers, Hulu can attract a large use base.
- With many popular content providers and bigger user bases, advertisers are more willing to pay for Hulu.
- If more content owners give exclusive licenses to Hulu, they will create more values for users and advertisers, which helps Hulu attract and retain more users and gain more advertising revenues.

Users play a crucial role in Hulu's successes.
Same-side impact
- More users can create more values to other users by helping Hulu learn more about users and give more relevant content and services, which helps Hulu.
- More users help one another through discussion boards, ratings and reviews, which also helps Hulu.
- More users can make network slower, which has negative impact on other users and Hulu.
Cross-side impact
- More users create more values for content owners and advertisers.

Similar to content owners, there's a challenge of uncertainty felt by advertisers.
Same-side impact
- More advertisers will bring in more money for Hulu. Furthermore, more advertisers will increase competition among one another and Hulu can raise the rate and earn more advertising revenues.
Cross-side impact: 
- More advertisers will attract more content owners to join, which helps Hulu succeed.
- More advertisers may annoy users and drive them away, which hurts Hulu.

Wednesday, March 16, 2011

Studios' and Netflix's Newest Threat: $1 Online Rentals From Zediva

The company thinks about its online service as a DVD rental and remote DVD playing and viewing service rather than a streaming service or anything else. An interesting combination of "low price point a la Redbox with place-shifting technology a la Slingbox".

Sunday, March 6, 2011


What were the key factors behind Google’s early success?
- If you have only one word to describe Google, what's that word? Google it!
At the beginning, it specialized in just one thing and did it very well: algorithmic search. Google.com offered more relevant and reliable search results with its index of one billion web pages, was revolutionary in its extremely simple interface, did not lure users to stay as long as possible on its website, and initially carried no ads. As it succeeded in this search service and built the customer trust and brand name, it began expanding other services: emails, maps, calendar and so on.
- Another day? Then another Google
Google constantly changes: It has learned from others, continuously improved, and frequently delivered innovative services and products. This has been a key factor not only for its early success but also for its sustainable growth. Examples are abundant: it learned from Overture but used CTR instead of CPC; it learned from DoubleClick and expanded AdSense; it learned from several email providers (e.g., Microsoft, Yahoo!, and AOL) and came up with Gmail. It can achieve the constant changes thanks to its obsession with innovation through adopting unconventional approaches for managing innovation.
- IPO? Yes and No
Yes, it did go ahead with IPO, but No, it was not the conventional IPO prospectus. The dual-class equity allows Google's management trio to have more power to be innovative and take risks without external pressure about replacement by investors. Ultimately, this dual-class equity protects the corporate values: 1. don't be evil; 2. technology matters; and 3. we make our own rules.