Why Do Platforms Bludgeon Their Partners?:
[Via SmoothSpan Blog]
I’m reading another story about Facebook building in functionality to their platform that used to be in the hands of partners, and killing the partner’s opportunity on the Facebook platform in the process.
There is definitely revenue to be had doing this, Bebo started out exactly this way and at one time had 100 million users. Even today, at least until now, they were making some $4 million a year off birthday cards and gifts. Now Facebook wants that all for themselves.
Is it really worth $4M a year, or even $10-20M a year to destroy partner’s trust in you? Why build for the Facebook platform if you know full well they plan to take the business away from you as soon as you prove it’s capable of growing to an interesting size? And is this really the only way Facebook can grow their revenue? Have they exhausted all the ideas to do something their partners aren’t? It sure looks like it.
Here is another one I shake my head at. Amid the flurry of very compromising emails (such as James Allchin saying the machines they were certifying wouldn’t work, it’s misleading, and retiring the day it shipped rather than deal with the fallout), we find HP deeply unhappy with Microsoft. They had invested in creating a generation of PC’s that stepped up to the performance Vista requires and were shocked to see Microsoft’s decision to certify machines that basically would not run Vista. Once again, a partner got bludgeoned, pehaps in the interest of placating other partners such as Intel.
Because in an iterated Prisoner’s Dilemma (where the situation is run again and again), the best strategy, the winning one, is usually to be altruistic and forgiving. Then both sides win.
Organizations that deal with collaborations like a modified Prisoner’s Dilemma might be more successful in maintaining those collaborations. Zero sum may work when conditions are relatively static.
But we conditions become chaotic, it is more important to keep as many options as open as possible. Creating self-defeating mechanisms for collaboration would not seem to be the way to proceed.
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