Technology →
- 16 Mar 2009
- Research & Ideas
When the Internet Runs Out of IP Addresses
Experts predict that within three years we will see the last of new Web addresses. What will happen then? The best solution is to create a market for already assigned but unwanted numbers, says Harvard Business School professor Ben Edelman. Key concepts include: Internet regulators are running out of IP addresses to assign new Web-based sites and services. The next IP standard is probably years away from widespread deployment. In the meantime, creating a market for unused addresses could help bridge the gap. Closed for comment; 0 Comments.
- 10 Nov 2008
- Research Event
Social Media Leads the Future of Technology
From Facebook to smartphones, advances in technology are changing the way we work and communicate. Professor David Yoffie led three experts in a recent panel discussion on "The Technology Revolution and its Implications for the Future" at the HBS Centennial Business Summit. Key concepts include: A lot of growth potential remains worldwide. The sticking point for business is spanning the gap between the physical and digital worlds. For example, it remains difficult to figure out consumers' specific intent on the Web. What people want most of all is technology that is simple to use, said one panelist. Closed for comment; 0 Comments.
- 07 Oct 2008
- Working Paper Summaries
Securing Online Advertising: Rustlers and Sheriffs in the New Wild West
Online advertising remains a "Wild West" where users are faced with ads they ought not believe and where firms overpay for ads without getting the results they were promised. But it doesn't have to be this way. Enforcement by public agencies is starting to remind advertisers and ad networks that long-standing consumer protection rules still apply online. And as advertisers become more sophisticated, they're less likely to tolerate opaque charges for services they can't confirm they received. During the past five years, Edelman has uncovered hundreds of online advertising scams defrauding thousands of users, including all the Web's top merchants. This chapter summarizes some of what he has found and what users and advertisers can do to protect themselves. Key concepts include: Advertising security gaps are widespread. Many companies don't view advertising fraud as a priority. Marketers often write off advertising fraud as an unavoidable cost of doing business. But effective fraud reduction can transform "unavoidable" losses into a bigger bottom-line and a real competitive advantage. Some advertisers compensate ad buyers in ways that discourage ad buyers from rooting out fraud. Furthermore, ad networks operate under mixed incentives in their supervision of partners, affiliates, and syndicators. Often, a marketer's partners and even its own staff have strong incentives to ignore problems rather than to take effective action. Closed for comment; 0 Comments.
- 24 Mar 2008
- Working Paper Summaries
Optimal Deterrence when Judgment-Proof Agents Are Paid In Arrears—With an Application to Online Advertising Fraud
It is commonplace for large entities (both advertisers and ad networks) to enter into relationships with numerous small agents such as Web sites, blogs, search syndicators, and other marketing partners. For example, one well-known affiliate network boasts more than a million affiliates promoting offers from the network's hundreds of merchants, and Google contracts with numerous independent Web sites to show Google's "AdSense" ads. Although these advertising agents are often small, they can take advantage of technology to claim payments they have not earned. In practice, the legal system cannot offer meaningful redress to an aggrieved advertiser or ad network. This paper argues that delayed payment offers a more expedient alternative—a sensible stopgap strategy for use when primary enforcement systems prove inadequate. Key concepts include: Online advertising markets are one of many markets where agents may be effectively unreachable through the legal system. Online advertising contracts presently lack any institution by which the payment structure can enforce good practices. Improving detection technology remains the preferred deterrent of online advertising fraud. Appropriate selection of a payment delay can achieve the benefits offered by contingent payment in other markets. Closed for comment; 0 Comments.
- 03 Mar 2008
- Working Paper Summaries
Testing a Purportedly More Learnable Auction Mechanism
Each year, auctions are used to determine how billions of dollars of goods and services will be allocated across the globe. On eBay alone, $52.5 billion in merchandise was exchanged in 2.4 billion auctions conducted during fiscal year 2006. Considerable attention has been paid in the academic literature to the question of how to design auctions with efficient allocation and revenue-maximizing properties. However, in part because auction rules are typically published and standard theory assumes economic agents are capable of computing optimal strategies from published rules, little attention has been paid to the question of how to design auctions whose optimal strategies are easy to learn. Evidence suggests that even when auction rules are published and dominant strategies exist, people nonetheless struggle and sometimes fail to learn to play their optimal strategy. As a result, the authors argue that the question of how to design a learnable, strategy-proof auction mechanism is an important one. Key concepts include: Designers of auction mechanisms should create mechanisms that are easier for people to learn. This paper describes an auction mechanism that has received attention in the computer science literature because of its theoretical property of being more learnable than the standard mechanism. In fact, the new mechanism produced slower learning in human subjects than the standard mechanism. Closed for comment; 0 Comments.
- 10 Dec 2007
- HBS Case
One Laptop per Child
The One Laptop per Child initiative wants to develop and distribute $100 laptops to poor children around the world. Despite eager observers and exciting breakthroughs technologically, it has found the path to customers more rocky than anticipated. Marketing has some answers, as a new case study details. Q&A with HBS professor John Quelch. Key concepts include: The XO laptop is a rugged little computer designed to help kids learn and play collaboratively. Some of its features raise the bar in the computer industry as a whole. Competitors are moving into the same market space to make low-cost laptops. However, the One Laptop per Child initiative is nonprofit. Despite some success, one of the biggest hurdles has been signing up governments to purchase the computer for their country's children. Closed for comment; 0 Comments.
- 28 Sep 2007
- Working Paper Summaries
Digital Interactivity: Unanticipated Consequences for Markets, Marketing, and Consumers
For digital marketing practice and theory, the last decade has brought two related surprises: the rise of social media and the rise of search media. Marketing has struggled to find its place on these new communication pathways. Old paradigms have been slow to die. This paper reviews early beliefs about interactive marketing, then identifies 5 discrete roles for interactive technology in contemporary life and 5 ways that firms respond. It concludes that the new media are rewarding more participatory, more sincere, and less directive marketing styles than the old broadcast media rewarded. Key concepts include: Successful interactive marketing may be less a matter of domination and control, and more a matter of fitting in. There is a human need to assert and present to the world a self-serving identity and to manage one's personal reputation. The form of interactivity most attractive to marketing is one that facilitates people's ability to construct their identity and contribute to the making of meaning. Closed for comment; 0 Comments.
- 23 Jul 2007
- Research & Ideas
HBS Cases: How Wikipedia Works (or Doesn’t)
For HBS professor Andrew McAfee, Wikipedia is a surprisingly high-quality product. But when his concept of "Enterprise 2.0" turned up on the online encyclopedia one day—and was recommended for deletion—McAfee and colleague Karim R. Lakhani knew they had the makings of an insightful case study on collaboration and governance in the digital world. Key concepts include: Despite thousands of participants, Wikipedia operates under a very ornate and well-defined structure of participation that enables them to produce a highly regarded online encyclopedia. A group of people in the Wikipedia world characterized as "exclusionists" could dampen user enthusiasm by increasing barriers to acceptance of Wikipedia articles. Knowledge-sharing technologies such as wikis are coming into increasing use in the corporate world, but companies must understand that a top-down approach to administering them will lead to certain extinction. Closed for comment; 0 Comments.
- 15 May 2007
- Working Paper Summaries
I’ll Have the Ice Cream Soon and the Vegetables Later: Decreasing Impatience over Time in Online Grocery Orders
How do people’s preferences differ when they make choices for the near term versus the more distant future? Providing evidence from a field study of an online grocer, this research shows that people act as if they will be increasingly virtuous the further into the future they project. Researchers examined how the length of delay between when an online grocery order is completed and when it is delivered affects what consumers order. They find that consumers purchase more "should" (healthy) groceries such as vegetables and less "want" (unhealthy) groceries such as ice cream the greater the delay between order completion and order delivery. The results have implications for public policy, supply chain managers, and models of time discounting. Key concepts include: Consumers spend less and order a higher percentage of "should" items and a lower percentage of "want" items the further in advance of delivery they place a grocery order. Encouraging people to order their groceries up to 5 days in advance of consumption could influence the healthfulness of the foods that people consume. Similarly, asking students in schools to select their lunches up to a week in advance could considerably increase the healthfulness of the foods they elect to eat. Online and catalog retailers that offer a range of goods as well as different delivery options might be able to improve their demand forecasting by understanding these findings. Closed for comment; 0 Comments.
- 16 Apr 2007
- Research & Ideas
Delivering the Digital Goods: iTunes vs. Peer-to-Peer
Apple's iTunes music download service and illegal peer-to-peer music downloads offer two contrasting approaches to delivering digital content to users. Can Apple and the recording industry seriously compete against free? Do iTunes and p2p help each other in some ways? Professor Ramon Casadesus-Masanell and collaborator Andres Hervas-Drane discuss their recent research on competition in digital distribution. Key concepts include: ITunes demonstrates that to compete effectively against free p2p networks, online digital distribution must deliver experiences to consumers that cannot be easily matched by decentralized, self-sustained peer-to-peer networks. In designing new models, managers must consider how robust a given design is to models of other industry participants with which they interact. Managers must also ponder how aggressive their business models are toward those of other players and ask whether or not complementarities are exploited. The "scarce" resource in digital goods distribution through p2p networks is not content, but bandwidth. As a consequence, ISPs will have a more visible role in shaping industry structure. Closed for comment; 0 Comments.
- 22 Jan 2007
- Research & Ideas
The Immigrant Technologist: Studying Technology Transfer with China
Immigrants account for almost half of Ph.D.-level scientists and engineers in the U.S., and are prime drivers of technology development. Increasingly, however, Chinese technologists and entrepreneurs are returning home rather than staying in the U.S. to pursue opportunities. Professor William Kerr discusses the phenomena of technology transfer and implications for U.S.-based businesses and policymakers. From New Business. Key concepts include: The trend of Chinese technologists and entrepreneurs returning home rather than staying in the U.S. is a trend that potentially offers both harm and opportunity to U.S.-based interests. Immigrants account for almost half of Ph.D.-level scientists and engineers in the U.S. and are strong contributors to American technology development. It is in the United States' interest to attract and retain this highly skilled group. U.S. multinationals are placing larger shares of their R&D into foreign countries, around 15 percent today. U.S.-based ethnic scientists within multinationals help facilitate the operation of these foreign direct investment facilities in their home countries. Closed for comment; 0 Comments.
- 15 Jan 2007
- Research & Ideas
The Business of Free Software
Breaking with a largely proprietary tradition, large IT vendors have invested several billion dollars into open-source software development. What's their motivation? The observations presented in research by professor Marco Iansiti and coauthor Gregory L. Richards suggest some fundamental changes in strategy used by technology companies. Key concepts include: IT vendors that traditionally have relied on proprietary-software development are increasingly turning to the open source software community to create pieces of their products. Many IT vendors invest in open source projects that draw customers to a vendor's mainly proprietary, core businesses—the razor/razor blade approach. This trend is changing some classic rules of strategy and forcing IT vendors to reconsider not only how they develop software but also where they derive value in their business models. Closed for comment; 0 Comments.
- 15 Dec 2006
- Working Paper Summaries
The Business of Free Software: Enterprise Incentives, Investment, and Motivation in the Open Source Community
IBM has contributed more than $1 billion to the development and promotion of the Linux operating system, and other vendors such as Sun are ramping up open source software efforts and investment. Why do information technology vendors that have traditionally sold proprietary software invest millions of dollars in OSS? Where have they chosen to invest, and what are the characteristics of the OSS projects to which they contribute? This study grouped OSS projects into clusters and identified IT vendors' motives in each cluster. Key concepts include: Cluster 1, the "money-driven cluster," consisted of projects that have received almost all of vendor investments. The eighteen projects in this cluster have received over $2 billion in investment. Cluster 2, the "community-driven cluster," has a large number of projects that have received almost no vendor investment. IT vendors have generally ignored projects in this cluster and appear to have no coordinated strategy for dealing with them. Examining the impact of projects in both clusters shows that vendors have not invested uniformly in high-impact OSS projects. Instead, vendors invest in projects that can serve to draw revenues to their own (largely proprietary) core business. Closed for comment; 0 Comments.
- 28 Sep 2006
- Working Paper Summaries
Scale without Mass: Business Process Replication and Industry Dynamics
Over the past ten years there's been a clear link between IT investment and productivity growth in the U.S. economy. But what impact has IT had on competition? This paper identifies several recent changes in the competitive dynamics of U.S. industries and shows that they are associated with IT intensity; the more IT and industry has, the greater the changes. Using case studies, previous research, and a simple model, the authors offer a theory that explains these patterns in the data. They argue that IT allows the rapid spread of business process innovations, which in turn leads to more turbulent and concentrated industries. Key concepts include: Since the mid-1990s, IT-intensive industries have seen higher levels of turbulence and concentration growth than have non-IT-intensive industries. The improved ability of firms to replicate business innovations affects not only productivity, but also the nature of business competition itself. Future research on the competitive impact of IT within a single industry could use case studies combined with economy-wide data analysis. This method would help clarify the impetus for technology investments, their timing, and their effects. Closed for comment; 0 Comments.
- 25 Sep 2006
- Research & Ideas
How Software Platforms Revolutionize Business
Cell phones, the Game Boy, and PCs are examples of products based upon software platforms—ecosystems where independent companies can provide products and services tied to the core technology. Playing in a software platform world can make you rich—ask ringtone creators—but it also demands special management skills that emphasize cooperation over competition. Professor Andrei Hagiu discusses his new book, Invisible Engines. Key concepts include: Software platforms have improved productivity and innovation in many industries, disrupted or destroyed others, and created entirely new businesses. Software platforms are powerful engines of change because of the malleability of code and of the fundamental functions they perform, which make it easy for them to march across industry boundaries; and because their multi-sided nature allows them to spawn vibrant ecosystems of complementors. Managing software platforms is about much more than creating technology. It takes skills in navigating cooperation and competition, building creative business models, and anticipating competition across industries. Closed for comment; 0 Comments.
- 28 Aug 2006
- Research & Ideas
Online Match-Making with Virtual Dates
Users of online dating sites often struggle to find love because the sites themselves make it more difficult than it needs to be. To the rescue: Virtual Dates, an online ice-breaker from Jeana Frost of Boston University, Michael Norton of HBS, and Dan Ariely of MIT. Key concepts include: Technology influences the tone and trajectory of relationships. The interface of online dating sites should be improved to help people filter better. Virtual Dates is an experimental interface that allows couples to communicate in real time using colors, words, and images. The idea of virtual spaces for natural interactions may have applications for managers and entrepreneurs. Closed for comment; 0 Comments.
- 16 Aug 2006
- Research & Ideas
Is MySpace.com Your Space?
Social networking sites such as MySpace.com have demographics to die for, but PR problems with parents, police, and policymakers. Are they safe for advertisers? A Q&A with Professor John Deighton. Key concepts include: Social networking sites such as MySpace.com are emerging as powerful advertising platforms reaching millions of desirable consumers. They will be advertising rivals to established Internet sites such as Google and Yahoo. Although MySpace has been the subject of some community criticism, MySpace advertisers don't seem frightened off. Closed for comment; 0 Comments.
- 04 Aug 2006
- What Do You Think?
What Happens When the Economics of Scarcity Meets the Economics of Abundance?
The "Long Tail," a term coined by Chris Anderson—and the title of his new book—describes the item popularity curve. Does the Long Tail represent a paradigm shift for business and consumer behavior? What are its implications for management going forward? Key concepts include: Chris Anderson first coined the term "the Long Tail" in Wired magazine. In a long-tail world, everything digital is available at all times. Anderson describes three conditions critical to potential long-tail profits, all of which are provided by the Internet combined with creative new software and hardware. Closed for comment; 0 Comments.
- 17 Jul 2006
- Lessons from the Classroom
Developing a Strategy for Digital Convergence
Technology was getting dull earlier this decade, says David Yoffie. But the sudden arrival of digital convergence has turned the tech world upside down. What are the right bets to place? Key concepts include: Digital convergence has arrived, creating entirely new products, services, and collaboration opportunities. The technology industry is tilting to horizontal. Players need to learn to complement each other as well as compete. Network effects create strong market advantages for companies that can capitalize on them. Closed for comment; 0 Comments.
Running Out of Numbers: Scarcity of IP Addresses and What To Do About It
Hidden from view of typical users, every Internet communication relies on an underlying system of numbers to identify data sources and destinations. Users typically specify online destinations by entering domain names (e.g. "congress.gov"). But the Internet's routers forward data according to numeric IP addresses (e.g. 140.147.249.9). To date, the Internet has enjoyed an ample supply of "IPv4" IP addresses, but demand is substantial and growing. Current allocation rates suggest IPv4 exhaustion by approximately 2011. A new numbering system, IPv6, would relieve scarcity, but incentives hinder transition: IPv4 works well for existing networks, and offers easier and simpler access to existing Internet content and services. As a result, to date few networks have begun to support v6. In principle regulators could order networks to implement v6, but the applicable Internet coordinating organizations lack authority or power to force such a transition. In the meantime, a market mechanism for v4 addresses offers important benefits, including allocating scarce v4 addresses to those who need them most, and putting a positive price on v4 space in order to encourage transition to v6. Thus, it seems v4 transfers can help both to mitigate the worst effects of v4 scarcity, and to build the incentives necessary for transition to v6. Key concepts include: IPv4 scarcity will limit future expansion, hinder some technologies, and impose new costs on networks and users. Engineers have developed a new numbering system, IPv6, which offers many more possible addresses than the current IPv4 address system. But incentives hinder transition. An IP address "market" for the paid transfer of IP addresses could offer important benefits and avoid the worst effects of v4 scarcity. Closed for comment; 0 Comments.