The story can be found here: http://www.readwriteweb.com/archives/goog-fb-data.php ]]> http://molecularvoices.molecular.com/2008/facebook-protecting-a-competitive-advantage/#comment-164 Vinod Sat, 05 Jan 2008 18:09:07 +0000 http://molecularvoices.molecular.com/2008/facebook-protecting-a-competitive-advantage/#comment-164 I generally agree on your comments on using a lock-in strategy to create competitive advantage. But maybe the example used, of recent events at Facebook, are not appropriate to demonstrate this. Facebook disabled Scoble's account. Now, does the user terms & conditions at Facebook explicitly say that users cannot do such a thing? The cell phone company example is interesting. They implicitly state that they don't want you to go away by clearly stating a 'termination fee' - thus laying down things up front. But did Facebook do that? Creating a competitive advantage via user lock-in is a common strategy among services where achieving economies of scale is important to achieving profitability. But disabling/disconnecting a user who is avoiding to get locked in just sends the wrong signal. I agree with Steve's comments about actions alienating current Facebook users. If the Beacon fiasco was not enough, maybe this will encourage Facebook users to spend more time on other networks. - Vinod I generally agree on your comments on using a lock-in strategy to create competitive advantage. But maybe the example used, of recent events at Facebook, are not appropriate to demonstrate this.
Facebook disabled Scoble’s account. Now, does the user terms & conditions at Facebook explicitly say that users cannot do such a thing? The cell phone company example is interesting. They implicitly state that they don’t want you to go away by clearly stating a ‘termination fee’ - thus laying down things up front. But did Facebook do that?

Creating a competitive advantage via user lock-in is a common strategy among services where achieving economies of scale is important to achieving profitability. But disabling/disconnecting a user who is avoiding to get locked in just sends the wrong signal. I agree with Steve’s comments about actions alienating current Facebook users. If the Beacon fiasco was not enough, maybe this will encourage Facebook users to spend more time on other networks.

- Vinod

In addition, think about the cost of switching hardware and software providers in corporate data centers. Creating vendor lock-in is a key corporate strategy for large system providers. IBM has built a business around Global Services and its ability to lock the vendor in its solutions. This reiterates Eric’s original comments about creating a key competitive advantage.