Friday, September 12, 2008

Suddenly, It's All About Network Connections

Of late, there have been a lot of discussions about network connections of different kinds. They all point to framing strategic opportunities and challenges from a network-centric points of view.
1. Mobile App Stores. Apple, Google and Microsoft are jockeying to get third-party developers to write applications on their mobile platforms. All three have mobile application stores with different names (naturally!). Not be left behind, RIM announced relationships with TiVo, Ticketmaster and MySpace.  It will be interesting to see how Handango responds to these recent shifts. Till now, Handango served as a multi-platform aggregator of applications.  Its role is now challenged by each of the major mobile companies seeking to establish their own proprietary app strore.

2. Yahoo opens up.  The battle between Yahoo and Google continues despite their attempted relationship, which may be running into problems.  Yahoo is striving to create the platform so that third-party widgets can be created to enhance its services.
 Yahoo plans to open up more with the first major redesign of its home page since May 2006. The changes will enable Yahoo users to plant more mini-applications known as "widgets" on personalized versions of the home page, said Ash Patel, executive vice president of the company's audience product division.
WSJ is reporting that:
On Friday, Yahoo is hosting a "Hack Day" for developers to start building versions of their service that integrate with its home page or that can be used by Yahoo Mail's 275 million monthly users...... [and....]
Scott Moore, head of Yahoo's media group, said Yahoo's media sites, which include heavily trafficked staples like Yahoo Finance and Yahoo News, have strong track records of drawing on outside content but see opportunities to expand. "We are not just doing this open thing because it is the flavor of the month," he said. "This open approach is really in our DNA."
3.  Apple iTunes patches things up with NBC.  When Apple launched its new Nano earlier this week, it also announced that it was patching things up with NBC.  As reported in NY Times,
Mr. Jobs also announced that NBC, a division of General Electric, was bringing its television lineup back to iTunes, 10 months after the two parties clashed over how much flexibility NBC would have on the pricing of new NBC programs. Both sides now say they got what they wanted. Television shows from NBC and other networks will all cost $1.99 for standard video quality, and $2.99 for high-definition video quality. Older shows like “Kojak” will sell for 99 cents...... [and..]
Mr. Jobs said in an interview that the resolution came through personal discussions with Jeff Zucker, the chief executive of NBC Universal. “We both knew we wanted to get this together, and our mutual customers wanted us to get this together,” he said. “They let us know, we worked it out, and everyone is happy.”
These three examples tell a lot about the challenges of developing winning strategies in the network era.
1. The criticality of attracting key developers as complementors to platforms. The mobile applications is now a major battle front and all the key companies are seeking to attract complementors. What is important is to see who links preferentially to one platform like iPhone compared to another.
2. Yahoo (somewhat belatedly) is opening up its platform. Perhaps it lost some valuable time because of the deal/counter-deal with Microsoft but its value hinges on how vibrant its third-party community becomes in the coming months.  It is not just competing againt Google and Microsoft. It is competing against Facebook and MySpace.  The one way that Yahoo can survive and be counted is if it attracts the requisite number (and exclusive) applications that make Yahoo a must-visit destination site. If that happens, Yang would have succeeded and its stock might be re-energized.

3. The NBC-Apple reengagement shows the criticality of mutual dependence. NBC needs Apple and Apple needs NBC and they have to mutually work out their differences.  And they have done so.  Often such skirmishes derail successes and both companies do not recover. It is refreshing to see that these two have worked out their disagreements. 

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