Chapter 12

Question 1

acqui-hire

Answer 1

Referring to “acquiring” a firm as a way to “hire” talent.

Question 2

short

Answer 2

Short selling is an attempt to profit from a falling stock price. Short sellers sell shares they don’t own with an obligation of later repayment. They do so in the hope that the price of sold shares will fall. They then repay share debt with shares purchased at a lower price and pocket the difference (spread) between initial share price and repayment price.

Question 3

CPM

Answer 3

Cost per thousand impressions—the amount charged every time an ad appears 1,000 times (M is the roman numeral for 1,000).

Question 4

content delivery networks (CDN)

Answer 4

Systems distributed throughout the Internet (or other network) that help to improve the delivery (and hence loading) speeds of Web pages and other media, typically by spreading access across multiple sites located closer to users. Akamai is the largest CDN, helping firms like CNN and MTV quickly deliver photos, video, and other media worldwide.

Question 5

content adjacency

Answer 5

Concern that an advertisement will run near offensive material, embarrassing an advertiser and/or degrading its products or brands.

Question 6

open source software (OSS)

Answer 6

Software that is free and whose code can be accessed and potentially modified by anyone.

Question 7

APIs

Answer 7

Programming hooks, or guidelines, published by firms that tell other programs how to get a service to perform a task such as send or receive data. For example, Amazon.com provides APIs to let developers write their own applications and websites that can send the firm orders.

Question 8

deep Web

Answer 8

Internet content that can’t be indexed by Google and other search engines.

Question 9

IPO

Answer 9

Initial public stock offering, the first time a firm makes shares available via a public stock exchange, also known as “going public.”

Question 10

colossal walled garden

Answer 10

A closed network or single set of services controlled by one dominant firm.

Question 11

network effects

Answer 11

Also known as Metcalfe’s Law, or network externalities. When the value of a product or service increases as its number of users expands.

Question 12

localization

Answer 12

Adapting products and services for different languages and regional differences.

Question 13

social graph

Answer 13

The global mapping of users and organizations and how they are connected.

Question 14

envelopment

Answer 14

A strategy whereby a firm with a significant customer base adds a feature to an existing product or service and eliminates the need for any rival, stand-alone platforms. Think Apple adding video to cameras, crushing the market for the Flip cam.

Question 15

free rider problem

Answer 15

When others take advantage of a user or service without providing any sort of reciprocal benefit.

Question 16

switching cost

Answer 16

The cost a consumer incurs when moving from one product to another. It can involve actual money spent (e.g., buying a new product) as well as investments in time, any data loss, and so forth.

Question 17

cloud

Answer 17

A collection of resources available for access over the Internet.