Prediction Markets at Google

I have to say that this is the first time I've been exposed to prediction markets, so my knowledge is somewhat limited. The case gets to be a little confusing after a while, but I think I got the general idea. Reading through this case, however, I was more intrigued by the effect of the GPM activity within the employees as compared to how Google could further use the prediction markets within the company.

I really like the idea of engaging your workforce in a company, and the use of the GPM tool with rewards was a great way in which Google had done this. I believe that there are many people in a company that only know what their current department is working on and take very little interest in the company as a whole. Through the use of GPM, Google was able to engage its workforce in ideas and projects that existed outside of an individual's work group. It was very interesting to me that the participants in the program were more interested in prestige and recognition, as compared to financial incentives. I think this goes a long way to tell companies that monetary compensation is not everything. So many companies fail to recognize employees who do a good job on more than an annual performance basis. Sure, it's nice to receive a $1,000 bonus in your paycheck, but there is also a large amount of personal satisfaction in being seen as a strong and respected employee within your company. I think managers and executives fail to understand this and think that giving employees more money will always be a solution to their dissatisfaction. I know I am starting to go off on a tanget about general employee compensation, so I will end it at that.

Moving forward, I think Google does need to work to engage more of its employees in the GPM program. Building it up through emails, signs, and countdowns would offer a great way for this to be done. I mean, most people know when NCAA March Madness is coming around for college basketball because there are communications sent out at many levels. The funny thing is.....this game isn't even related to your job! Google needs to continue promoting the GPM program as a fun way to interact between coworkers. I agree that bigger prizes might draw more people, but Google should not lose site of the value of the recognition the employees receive for making good trades. I like the idea of allowing employees to share their trading information with others, or keep it entirely confidential. That is an option that should be in the employee's hands though.

Once Goggle has developed a larger user base for its prediction markets, I think it then has the opportunity to decide how it could leveage this information to increase its bottom line. I do believe it could be a valuable tool if applied correctly.

Threadless

In my opinion, the Threadless business plan is all about the online community. If Threadless decides that it wants to begin selling its shirts to large retailers, it is going to have to justify and clear this with its online community first. While selling to large retailers could heavily increase the revenue potential of Threadless, it could do so at the expense of its community. My guess is that a lot of the users of the website derive value from having access to shirts that are not available at normal retail stores. Selling to retail outlets would remove this value. Furthermore, Threadless shirts at retail stores would have to compete with other larger brands, such as Nike, Champion, Lee, etc. These are extremely large operations which are able to compete largely on brand and price. Threadless is not known in the retail sector, so it might end up having to sell its retail shirts for a cheaper price than what it does on the website. This could cause a lot of the non-designers to forego purchasing on the website and turn their attention to retail outlets.

In the end, I would not simply tell Threadless to drop the idea of selling to large retailers. I think the company needs to communicate with the online community and receive feedback if it decides to make this move. After all, Threadless understands that all of its decisions in the past directly affected its online community, and attempted to reach out as much as possible to get the community's input. It should do the same thing in this case. If the online community is largely against the idea, then it may not be wise for Threadless to move forward. Without the support of the community and designers, Threadless would lose the value of the website.

If the online community supports the selling of shirts to retailers, I would suggest that Threadless limit the shirts that the retailers have access to. This would ensure that some designs are strickly available via the website, and would also reduce the need to Threadless to greatly increase the capacity of its production facility. It should also move forward cautiously with this venture, first testing the waters to see if the shirts actually sell in the retail sector. If they do not sell, Threadless could simply forego the selling of shirts to retail outlets and focus back on the online community. This is a tricky, yet welcomed decision that Threadless is faced with. It needs to consider the interests of all stakeholders before making a final decision on how to move forward.

LinkedIn/Facebook

I'm not a user of LinkedIn and have never actually visited the site, so my knowledge on this social media outlet is very limited. That being said, I think there is a ton of opportunity for professionals to network on this site and is something that I will probably check out when I get some free-time after grad school (if that free time ever happens). I like the concept, but I don't think I'd really fully comprehend it until I started using the site. The case tries to describe the process, but it gets a little overwhelming after a bit.

Even though I don't use the site, I still think it would be advantageous for LinkedIn to provide the first option for revenue recognition; specifically, providing a bundle of eight new services for a monthly charge of $15. This would create a tiered system on the site that would allow premium services for those users willing to pay. Not everyone would be affected, so those happy with the site as is should not have any complaints. I would be hesitant to remove the intermediaries as a link between the members. Although a fee would be paid for this service, I still think relationship managers would get hit with loads of requests that they would not have considered in the current scenario. That would lead to potential for a large drop in these users. So my overall recommendation is for LinkedIn to move forward with the additional premium services, but to be careful and move slowly if they try to implement the removal of the intermediaries.

As far as Facebook goes, I see loads of opportunity for targeting advertising based on the profiles created by the users. However, I'm worried that this could infringe on privacy rights and lead to more public apologies by Facebook. If Facebook developed an opt-in program for the specific advertising, I think it would help to bypass this issue. I'm sure there are some people out there who would prefer to receive advertisements that relate directly to their interests (I would be one of them). I also think Facebook needs to continue to focus on the Facebook Connect ability to link with other sites in order to increase its revenue stream. As the largest online social community, Facebook needs to leverage itself in every way possible.

Wikis/Wikipedia

I think wikis are an interesting concept, but I've always been reserved from using sites such as Wikipedia, due to the fact that I can't be sure that what information I'm receiving is correct. The idea that anyone is allowed to edit postings causes me to have some reservations with this type of system. Granted, the readings from this week note that Wikipedia's error rate in its articles is only slightly larger than that of Encyclopedia Britannica. That single statistic helps to alleviate my fears of using information on the site, but I will still always hold some level of mistrust with what I find. I'm also very interested to see what the academic world thinks of using Wikipedia as a source in a research paper. I know in the past I've been told to avoid Wikipedia for the reasons I stated above. However, do most teachers allow Wikipedia to be used as a credible source, now that it has grown to a size where the information is highly reviewed and edited if found to be incorrect? That may still be the preference of the teacher, but thinking as a high school student, it is a question I would ask before starting any new class.

Everything I wrote above is specific to Wikipedia, but I do want to comment on wikis in general for corporation use. My opinion is that wikis could potentially help a business, but only if it develops a culture where wikis are found to be highly valuable and people wish to share their ideas through this medium. I'll be honest and say that I would rather pick-up the phone or send an email, rather than use a document with the wiki feature. I also think that there are still quite a few baby boomers in the work industry who would be confused with the wiki format. Furthermore, many people in the work industry are not proficient typists, so using wiki documents could have a negative effect on their productivity. Even beyond this, some people are better off expressing themselves through phone or personal conversations. Ideas may lose their luster if they are transmitted through a wiki format.

Although there appear to be some downsides of this technology, I also think there are certain general situations where it may be successful. I think two main things have to be considered before a company would consider using wikis. First, there has to be a high level of trust among the employees of the business. If employees do not trust each other and think they have valuable things to offer, the wiki documents will be constantly changing as people attempt to assert their opinions over others. Second, I think a company needs to have a structure that could take advantage of wikis. At this point in time, it isn't something that any business could just pick-up and start using. For instance, a highly decentralized business with little interaction between an older population of co-workers could find this quite difficult. However, a company that utilizes small teams familiar with technology- working together to find solutions- could see a huge benefit from this technology. Again, I believe it all comes down to what type of interactions occur at your business and whether your people trust each other. Sure....everyone writes e-mails at work.....but there is a huge gap between writing an e-mail and expressing all your ideas through a constantly evolving online document. My belief is that wikis will eventually work their way up in corporations......I just think they may be about 10 years ahead of their time for many corporations and businesses.

BzzAgent

It would almost seem logical to say that any company not paying some marketing attention to social media sites is losing out on a valuable opportunity. In fact, not paying attention to what consumers are saying about you may be actually hurting you in the end. Blogs have always been popular since the development of the internet; however, their ability to spread information has been somewhat limited. With the growth of social sites like MySpace and Facebook, it now only takes a few clicks until you can create your own posting or publish a link on your page to a friend's blog/video posting. In this manner, a funny or interesting blog/video can catch on like a wild-fire and be passed over a large network of people in a very short time frame. The supplemental reading this week (Harnessing the Power of the Oh-So-Social Web) probably best makes this point with its example of Dell and a customer who started blogging about a very negative experience. This one event sparked a passing of information that made Dell look bad. For this reason, Dell created the "Direct2Dell" blog to communicate directly with customers, recognizing the need to take part in a social network linked to the end user.

The issue is that companies have very little control over what consumers have to say about their products. However, this can been seen as a good thing if companies approach it the right way. What can be more valuable than direct, honest feedback from the consumer? My opinion is that a lot of managers/executives within companies don't want to hear what they are doing wrong, so that it doesn't hand them extra work to do to correct problems. And let's be honest....no one likes to be told that they are doing something wrong....it doesn't feel good.

I believe that BzzAgent needs to keep its blog site alive. For as much time and resources this site may require, it can also provide some extremely valuable information that can not be obtained through traditional methods. Instead of canceling the blog site altogether, BzzAgent should look into ways in which it can better take that information and make sense of it. I think BzzAgent needs to better determine what exactly the purpose is of its blog site. If it is simply using it to run "90 day" blogs to provide information about the workings of the company, then I really see this as a waste of time. It needs to blog about things that are important to the company which weigh heavily on the consumer. From my experience, consumers are very happy to provide feedback when they know someone is listening. In fact, studies have shown that consumers are more likely to purchase products from companies that provide surveys for feedback, because the consumers feel the company wants to make changes to benefit them. In the same respect, BzzAgent needs to use its blog site in a strategic marketing way, focusing on ways it can improve its systems and offerings. The supplemental article stated it best when it said "the potential benefits of direct and intimate customer relationships that social applications can provide are just too compelling for companies to deny." I truly believe in this statement and think that social networks provide one of the best ways to promote customercentric thinking within a company. After all, the use of social networks is only going to increase in the future....why not get onboard now???

Brightcove

I think the move to internet television is one of the most interesting things currently going on with the technology industry. We already touched on many of the issues in the Netflix case, so there is no need to restate all the issues again. I think Brightcove is in a good position to take advantage of this market, as they have already become established and developed the relationships needed to be successful. Competitors face a difficult task as Brightcove has formed alliances with customers at the upper end of the market, whereas Google, YouTube, and other competitors have not. Brightcove has taken advantage of the first mover approach in this respect and it should pay off for them in the long run.

The end of the case presents some questions for how Brightcove should move forward. I think it is an absolute necessity that it continue to develop the features that are valued by the consumer. I believe that it will be the company offering the most diverse amount of video to the customer that will be successful in the end. Brightcove should focus largely on building its network through heavy marketing to increase its user base. The value of the site will increase as more people use it, hopefully to a point where switching to a competitor will be too high of a cost to the consumer. Whether Brightcove decides to build or buy this platform is a hard decision to make. By building the network, it will have control over all aspects and features of the site. However, buying pieces could be cheaper and would allow them to develop the network more quickly, rather than having to wait for development.

I do not think it would be a good thing for Brightcove to expand internationally at this point in time. The internet television market is still being developed, and there are many variables that have yet to be worked out. I'm also not sure how well the European and Asian markets would adapt to this type of technology. While opportunities may present themselves, the case does not offer much information regarding the risks and potential that is available for these new markets. Just because one thing works well in the US doesn't mean that it is going to work well in other countries. If Brightcove understands the international customer and is willing to modify its business plan to accommodate differences, then there may be some profit that can be made from an international expansion. I just think the market is not quite established enough and Brightcove still has has to build-up certain parts of its company. Money would be better spent on the company, rather than expansion, at this point in time.

Google

I can't say that I adopted Google as soon as it was developed. In fact, I am still a user of Yahoo as my main search engine and e-mail carrier. However, in the very near future, I will be switching to Google and G-mail largely due to the features and benefits it offers over Yahoo. The interface is just so much easier. I think Google has been extremely successful over the past 10 years largely due to the fact that it has taken something that is already out there and made it better. Simply looking at exhibit 3 from the case is evidence of this fact. Specifically, Google introduced Google Maps when a large number of online mapping systems were already available. Before Google Maps, I was a user of Mapquest, but found Google to be much more user friendly, with features that were not offered by Mapquest. I won't go through all the services offered by Google from the exhibit, but I think most people can look at the list and think of sites that existed for the same purpose before Google released their version.

The end of the case presents some questions as far as how Google should move forward in the future. I think they should spend a large amount of time developing superior search solutions and monetizing those solutions through targeted advertising. However, I also think Google has a great opportunity to move into new areas, such as becoming a portal like Yahoo or MSN. This might have been difficult for Google to have done 5 years ago, but it has now developed such a large user base that it would seem logical for it to expand its homepage. I personally would like to see it add the same types of portals as Yahoo so I wouldn't lose this benefit in my switch between the two.

I did not like the ideas of expanding as an intermediary into financial transactions or developing products to compete with Office and Windows. I think these may be undertakings that are too risky as they are already dominated by players in the market (Paypal for instance as a transaction mediary). Granted, Google may come up with something better, but these companies already have established users and the switching costs are higher for these types of products. It goes beyond simply changing your homepage default from Yahoo to Google.

NTT DoCoMo, Inc.

I have to say that I enjoyed reading about the technologies that DoCoMo is developing; however, the case really seemed to jump around a lot, which made it somewhat confusing. It switched back and forth so much with different partnerships and competitors that I'm still a little confused on the different options that DoCoMo has moving forward.

I do think that the company has done a very good job with the FeliCa Networks, and that is the basis of their competitive advantage. While the idea of having a phone equipped with eMoney, building IDs, and other applications appeals to me, I am very concerned with the security issues around this new technologies. The case does touch on the security issues, but not as much as I would like to have seen. For instance, if something happens and you lose your phone, how hard is it for someone to use the money stored on there or gain access into a building? I know the case mentions that you can call your service provider to have the phone functions disabled, but there may be times where you don't realize your phone is gone until it is too late. I would suggest that you are required to provide a 4 digit password anytime you use your phone for something like money transactions or gaining access to secure buildings. This would at least help to prevent some unauthorized use of the features. Although this would slow down the transaction process itself, I think it is a necessary step. Perhaps this goes against the whole idea of the "speed of the process", but without solid security measures, there could be some very unhappy customers.

As far as the case is concerned, I think DoCoMo needs to work with Edy and Suica to develop a reader that will incorporate the three different FeliCa cards at checkout. This would be a strong incentive for retailers to push for this form of payment. I agree with the case when it states that retailers would not want to install three different readers. This would be a step in the wrong direction for them. It should be noted though that only 10% of total consumer spending in through a credit card, so this method of payment has to be largely advertised if it is expected to grow. If this segment does grow, DoCoMo should work hard to ensure that it's cards are the first ones that end up in a consumer's wallet.

Overall, DoCoMo needs to be careful as it moves forward with its operations. As noted, the company does not have a large amount of experience in dealing with financial services. In the past, it has been strong on the transaction side, which is where it's strategic advantage is best found. If DoCoMo decides to transition further into the credit industry, it must gain further knowledge about how companies in this industry are successful. Providing credit to unworthy candidates could have some very negative effects on the company. I would suggest that DoCoMo enter a nonexclusive partnership with incumbent credit card companies or enter an exclusive partnership with a single card issuer. This would allow DoCoMo to benefit from what it does best (transaction processes), while allowing the partner(s) to benefit from their core strengths (issuing of credit). It would be taking quite a risk for DoCoMo to not have a partner and this may end up damaging the company in the future.

Netflix

If there is one thing in my life that I would not trade, it is my Netflix subscription. Since my first rental on January 3, 2006, I have rented and viewed 532 movies (I actually just counted this tonight). If you do the math, that is 49 months that I have held my account. A simple conversion equates this to nearly 11 movie rentals a month. To some people, it may seem like I have nothing better to spend my spare time on. I'd say this were true if I didn't have such a love of movies. Thank god the girl I am marrying in September of this year shares my passion. The best part about Netflix is that I pay $15.79 per month for an unlimited amount of 2 movies at a time (This is only the middle-of-the-road plan). If I had rented through Blockbuster at $4 per movie, I would be paying nearly $44 per month. Savings with Netflix since January of 2006 = $1,422.

This is actually the first time I've done this calculation and am surprised by the savings I've received for an industry I love. I realize that everyone is not as fanatical about movies as I am, but only renting 4 movies a month would have been a breakeven point. I had to laugh when I read in the case that Blockbuster never thought that online video rentals would be a sustainable business model. I used to rent from Blockbuster.....then Netflix starting showing up at my door. The only time I returned to Blockbuster was to get a new release that I would have needed to wait for through Netflix. Now, Netflix has a content management system which limits the time you have a wait for the newest, most popular release. Needless to say, my Blockbuster card is currently occupying space in a landfill as compared to my wallet. Blockbuster lost millions and millions of dollars by turning a blind eye to the potential of the online video rental industry in early 2000. It's move to an online subscription in 2004 was simply an attempt to recover what it had already lost. Unfortunately for Blockbuster, Netflix has already established its position and gained a large amount of loyalty from its users. Blockbuster's online service simply minimizes the damage done by Netflix.

I've been with Netflix as it has moved through its progression toward VOD. I currently own a Playstation 3 and have the Netflix CD which allows you to stream instant movies to your TV through the PS3. This system works incredibly. The only complaint I have is that the instant movies on Netflix are never the newest releases, but I can deal with that as I typically receive those in the mail. I think Netflix has chosen the correct path, given the options presented at the end of the case. It was smart to not partner with a competitor....Netflix was already too strong of a brand. The progression of "view instantly" on your computer to now being able to stream to your television has kept me very satisfied with Netflix. The company has recognized where its market is going and has adapted itself to those directions. I will be very interested to see where this industry goes as consumers begin to demand new releases immediately available for viewing on their HD televisions. We are in a period of transition and I am rooting for my friends at Netflix.

Warner Bros and BitTorrent

I enjoyed reading this case, but I didn't really find any questions to answer at the end. I was a bit surprised that BitTorrent was able to establish an agreement with Warner Brothers, given the issues that have surrounded peer-to-peer networks in the past. I would think that Warner Brothers will move forward very carefully with this partnership to ensure that all their content remains protected by BitTorrent. There are always people out there who are looking to get something for nothing. However, I do have to give Warner Brothers credit as they are taking all the risk of being a first mover in this new industry. I think they recognized that, like the music industry, they were missing out on a lot of online consumers who would pay for their product. If successful, Warner Brothers stand to make quite a bit of money by being the only one in the market with the electronic distribution system.

One thing I do believe Warner Brothers needs to monitor moving forward is the sharing of illegal movie files online. If the movie industry is going to be successful in online content distribution, they are going to have to go after people who illegally distribute their product. The music industry had to do this same thing when they went after the top downloaders of illegal music files. The motion picture industry may be forced to bring lawsuits against hackers and illegal file sharers as well. It will be interesting to see if the security settings that BitTorrent has put in place will be strong enough to keep the content safe.

If the BitTorrent and Warner Brothers partnership is successful, I would expect BitTorrent to solicit other movie studios for online access to their content as well. Warner Brothers has taken the first step. It is up to the rest of the movie industry to follow them. That is the direction the movie industry needs to go as consumers begin to demand more online video content. I'm not sure whether that will be through P2P networks or some other vehicle.

ezboard

Ezboard is an interesting company largely due to the fact that it was able to survive the Internet bubble burst in 2001. Unfortunately, that left it with very little resources to build upon its infrastructure that was the basis of its original design. For the years following 2001, ezboard was just trying to stay in business by making very small changes with what little resources it had. If Robert Labatt hadn't come into the company, I really think the company would have tanked within a year. It did not seem like any anyone on the management team had an idea of how to move forward, most likely due to the fact that the company was so constrained on resources. I think Robert Labatt knew that upgrades were necessary if the company was going to stay in business and did a good job to get it on track. I also think the company was under very poor management before Robert was hired. The fact that he could cut costs by such large numbers indicates to me that the CEO before him really did not know how to run an efficient company in any regards.

At the present time of the case, ezboard is at a critical point where it is going to grow and prosper, or fade away to banruptcy. The direction it goes all depends on how the company leverages its new software platform with its subscription model. If this is done correctly, the company should be able to see some strong growth in both revenue and profit. In my opinion, ezboard needs to first use the "slow-go" approach for Version 8.0. It should have learned that its users are very fickle, as evident in how many were lost during its 25 hour shoutdown when it switched data centers. Although ezboard will have to forego immediate revenues by taking the six months to test and collect data, it stands to lose a lot more if it unveils a program full of bugs and other software issues. Once version 8.0 is in place, I'd like to see ezboard go to a tiered subscription model, where less access is given to non-paying users. I mean, 99% of the users (9.9 million people) are using the site for free! It's amazing they are breaking even under these conditions. If the free users are limited to whether they can post or how much they can post, it would create a larger benefit gap between them and the paying users. While some people would leave ezboard for a competitor, I think a large number would also sign up for the basic plan just so they can continue to communicate with people they know on a system they trust.

The bottom line is that ezboard has the justification it has been looking for to modify its subscription program through the release of Version 8.0. It will now have an up-to-date site that competes well with the rest of the market. It needs to capitalize on the 99% of its users are are paying nothing to use the site, and even a 1% increase in subscriptions will generate a substantial amount of revenue.