Exam 2 Key Terms Flashcards
Network Effects definition
Also known as Metcalfe’s Law, or network externalities. When the value of a product or service increases as its number of users expands.
What are Complementary Benefits?
Products or services that add additional value to the primary product or service that makes up a network
What is TCO [Total Cost Of Ownership]
An economic measure of the full cost of owning a product (typically computing hardware and/or software). TCO includes direct costs such as purchase price, plus indirect costs such as training, support, and maintenance.
What are Platforms?
Products and services that allow for the development and integration of software products and other complementary goods. Windows, the iPhone, the Wii, and the standards that allow users to create Facebook apps are all platforms.
What is staying power?
The long-term viability of a product or service.
What are switching costs?
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.
Cross-Side Exchange Benefit
When an increase in the number of users on one side of the market (console owners, for example) creates a rise in the other side (software developers).
One-Sided Market
A market that derives most of its value from a single class of users (e.g., instant messaging).
Same-Side Exchange Benefits
Benefits derived by interaction among members of a single class of participant (e.g., the exchange value when increasing numbers of IM users gain the ability to message each other).
Two-Sided Market
Network markets comprised of two distinct categories of participant, both of which that are needed to deliver value for the network to work (e.g., video game console owners and developers of video games).
Monopoly
A market where there are many buyers but only one dominant seller
Oligopoly
A market dominated by a small number of powerful sellers.
Technological Leapfrogging
Competing by offering a new technology that is so superior to existing offerings that the value overcomes the total resistance that older technologies might enjoy via exchange, switching cost, and complementary benefits.
The Osborne Effect
When a firm preannounces a forthcoming product or service and experiences a sharp and detrimental drop in sales of current offerings as users wait for the new item.
Adaptor
A product that allows a firm to tap into the complementary products, data, or user base of another product or service.
Backward Compatibility
The ability to take advantage of complementary products developed for a prior generation of technology.
Blue Ocean Strategy
An approach where firms seek to create and compete in uncontested “blue ocean” market spaces, rather than competing in spaces and ways that have attracted many, similar rivals.
Congestion Effects
When increasing numbers of users lower the value of a product or service.
Convergence
When two or more markets, once considered distinctly separate, begin to offer features and capabilities. As an example: the markets for mobile phones and media players are converging.
Envelopment
When one market attempts to conquer a new market by making it a subset, component, or feature of its primary offering.
Web 2.0
A term broadly referring to Internet services that foster collaboration and information sharing; characteristics that distinctly set “Web 2.0” efforts apart from the static, transaction-oriented Web sites of “Web 1.0.” The term is often applied to Web sites and Internet services that foster social media or other sorts of peer production.
Collaborative Consumption
When participants share access to products and services rather than having ownership. Shared resources can be owned by a central service provider (e.g., ZipCar) or provided by a community that pools available resources (e.g., Airbnb, Uber).
Peer Production
When users collaboratively work to create content, products, and services. Includes social media sites, open source software, and peer-produced services, such as Skype and BitTorrent, where the participation of users provides the infrastructure and computational resources that enable the service.
Blogs
Online journal entries, usually made in a reverse chronological order. Blogs typically provide comment mechanisms where users can post feedback for authors and other readers.
Earned Media
Promotions that are not paid for or owned but rather grow organically from customer efforts or other favorable publicity. Social media, word of mouth, and unsolicited positive press mentions are all examples of earned media.
Inbound Marketing
Leveraging online channels to draw consumers to the firm with compelling content rather than conventional forms of promotion such as advertising, e-mail marketing, traditional mailings, and sales calls.
Owned Media
Communication channels that an organization controls. These can include firm-run blogs, Web sites, apps, and organization accounts on social media such as Twitter, Facebook, Pinterest, YouTube, and Instagram.
Paid Media
Refers to efforts where an organization pays to leverage a channel or promote a message. Paid media efforts include things such as advertisement and sponsorships.
Trackbacks
Links in a blog post that refer readers back to cited sources. Trackbacks allow a blogger to see which and how many other bloggers are referring to their content. A “trackback” field is supported by most blog software and while it’s not required to enter a trackback when citing another post, it’s considered good “netiquette” to do so.
Blog Rolls
A list of a blogger’s favorite blogs. While not all blogs include blog rolls, those that do are often displayed on the right or left column of a blog’s main page.
Long Tail
refers to an extremely large selection of content or products. The long tail is a phenomenon whereby firms can make money by offering a near-limitless selection.
Griefers
Internet vandal and mischief maker; also sometimes referred to as a troll.
Neutral Point Of View (NPOV)
An editorial style that is free of bias and opinion. Wikipedia norms dictate that all articles must be written in NPOV.
Roll Back
The ability to revert a wiki page to a prior version. This is useful for restoring earlier work in the event of a posting error, inaccuracy, or vandalism.
What You See Is What You Get (WYSIWYG)
A phrase used to describe graphical editing tools, such as those found in a wiki, page layout program, or other design tool.
Wiki
A Web site that can be modified by anyone, from directly within a Web browser (provided that user is granted edit access).
Wikimasters
Individuals often employed by organizations to review community content in order to delete excessive posts, move commentary to the best location, and edit as necessary.
Social Networks
An online community that allows users to establish a personal profile and communicate with others. Large public social networks include MySpace, Facebook, LinkedIn, and Google’s Orkut.
Viral
In this context, information or applications that spread rapidly between users.
API (Application Programming Interface)
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 Web sites that can send the firm orders.
Free Rider Problem
When others take advantage of a user or service without providing any sort of reciprocal benefit.
Hash Tags
A method for organizing tweets where keywords are preceded by the # character.
Microblogging
A type of short-message blogging, often made via mobile device. Microblogs are designed to provide rapid notification to their readership (e.g., a news flash, an update on one’s activities), rather than detailed or in-depth comments. Twitter is the most popular microblogging service.
Tweets
A Twitter post, limited to 140 characters.
Prediction Market
Polling a diverse crowd and aggregating opinions in order to form a forecast of an eventual outcome.
Wisdom Of Crowds
The idea that a group of individuals (the crowd), often consisting of untrained amateurs, will collectively have more insight than a single or small group of trained professionals.
Crowdsourcing
The act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined generally large group of people in the form of an open call.
SMART
The social media awareness and response team. A group tasked with creating policies and providing support, training, guidance, and development expertise for and monitoring of a firm’s social media efforts.
Astroturfing
Engineering the posting of positive comments and reviews of a firm’s product and services (or negative ones of a firm’s competitors). Many ratings sites will penalize firms that offer incentives for positive feedback posts.
Embassy
In the context of social media, an established online presence where customers can reach and interact with the firm. An effective embassy approach uses a consistent firm name in all its social media properties.
Online Reputation Management
The process of tracking and responding to online mentions of a product, organization, or individual. Services supporting online reputation management range from free Google Alerts to more sophisticated services that blend computer-based and human monitoring of multiple media channel
Sock Puppets
A fake online persona created to promote a particular point of view, often in praise of a firm, product, or individual. Be aware that the use of undisclosed relationships in endorsements is a violation of U.S. Federal Trade Commission rules.
Short
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.
Cloud
A collection of resources available for access over the Internet.
Content Delivery Networks (CDN)
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.
Dark Web
Internet content that can’t be indexed by Google and other search engines.
Network Effect
Also known as Metcalfe’s Law, or network externalities. When the value of a product or service increases as its number of users expands.
Open Source Software (OSS)
Software that is free and whose code can be accessed and potentially modified by anyone.
Social Graph
The global mapping of users and organizations and how they are connected.
Switching Costs
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.
Content Adjacency
Concern that an advertisement will run near offensive material, embarrassing an advertiser and/or degrading their products or brands.
