Diffusion and Oscillation of Telecommunications Services: The Case of Web 2.0 Platforms

Diffusion and Oscillation of Telecommunications Services: The Case of Web 2.0 Platforms

Tobias Kollmann (University of Duisburg-Essen, Germany), Christoph Stöckmann (University of Duisburg-Essen, Germany) and Carsten Schröer (University of Duisburg-Essen, Germany)
DOI: 10.4018/978-1-60566-194-0.ch036
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Abstract

The diffusion of a Web 2.0 product or services is, unlike to traditional consumer or industrial goods, not only based on purchase. Full acceptance of Web 2.0 platforms occurs by recurring utilization. The chapter focuses on diffusion characteristics of this innovative category of ICT products and provides management concepts for competition. The concept of critical mass is applied to different growth scenarios. Additional success factors are discussed. Particularly the permanent supervision of a platform regarding its compliance with qualitative, as well as ethical and legal standards is of great importance. Adjustments to external market conditions, proactive management, and a bilateral marketing approach are a key to lasting success within the Net Economy. Markets are never settled, due to the ever changing and oscillating conditions. The chapter shows that there is always a chance to capture a market or at least to grow against competition in a Web 2.0 setting.
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Critical Mass As A Success Factor

The extension of electronic networks and the use of information and telecommunication technologies for the digitalization of value creation lead to a new economic dimension (Lumpkin & Dess, 2004). This newly established level of value creation, the so-called Net Economy, provides room for innovative business models and successful start-up firms (Kollmann, 2006). An increasing number of companies participate in the economic potential of the internet which leads to a rising level of competition. Competing players either win a market and participate in a stable and sustainable business development or fail with their idea within a short period of time (Shapiro & Varian, 1999). The roots of this phenomenon are derived from an economies of scale effect that keeps aggravating itself instead of declining. Every new user of an offered platform (community or marketplace) helps to raise the value of a network and makes it even more attractive for further participants. A higher number of communication and transaction activities are the possible outcome. A rising quantity of community members also increases the perceived attractiveness (site stickiness) of a platform. This can be illustrated by the following two examples: A rising number of members subscribing to an E-Community (Kollmann, 2006) raises the chance to meet likeminded individuals or to receive answers to posted questions. Also a rising number of users to an E-Marketplace (Kollmann, 2006) rises the probability to find interested customers for offered products of a supplier.

According to the presented scenarios, a special focus has to be put on the critical mass phenomenon, because the subjectively perceived attractiveness of a system (e.g. community) is highly correlated with the already registered number of users. A certain number of users within a network are necessary to create value among the participants at a sophisticated level. Reaching this level is essential for a network, because the enrolled participants will be reinforced to use the system on an ongoing basis, and it will become easier to convince new users to join in (Kollmann, 1998). The minimum number of participants to maintain a sufficient utility on a long-term basis is referred to as the critical mass (Weiber, 1992).

Especially in a Net Economy setting young companies experience a very competitive environment to reach the critical mass (Kollmann, 1998). Oftentimes, the winners of this race drive smaller competitors or copycats off the market. This conception reinforces itself in a Web 2.0 setting (O’Reilly, 2005), where customers or members leave the status of pure information consumers. Their status changes to an active information provider and editor role (O’Reilly, 2005). Therefore, growth at a fast pace in regards to the number of users becomes the critical success factor to leave the zone of competition as a winner. Actually, the winner of this battle is able to establish a close too monopolistic market position (Shapiro & Varian, 1999). The attractiveness for new users to join a network is even higher, if everyone else already joined in.

Key Terms in this Chapter

Vapor Marketing: Is characterized by promising announcements to the market on products or services in advance and the management of expectations combined with additional online and offline marketing activities.

Critical Mass: Of users is an important success measure for Web 2.0 platforms, because the subjectively perceived attractiveness of a system (e.g. community) is highly correlated with the already registered number of users. A certain number of users within a network are necessary to create value among the participants at a sophisticated level. Reaching this level is essential for a network, because the enrolled participants will be reinforced to use the system on an ongoing basis, and it will become easier to convince new users to join in. The minimum number of participants to maintain a sufficient utility on a long-term basis is referred to as the critical mass.

Web 2.0: Is the next evolutionary step of the internet. In the past the internet used to be recognized as a technology to publish and distribute data, information and media content. This view was based on split-up roles: Private and commercial publishers of web contents with an active role on the one hand, and passive consumers on the other hand. This golden rule changed in 2005, when Web 2.0 concepts as a new category of websites were established. The traditional differentiation between active content providers and passive consumers diluted. On Web 2.0 platforms users are able to generate and affect contents. User generated content became the slogan of Web 2.0. The active role of users built the basis for innovative business ideas, which were unthinkable before. Many Web 2.0 business models like online communities or video platforms are centered around community structures.

E-Community: Stands for a virtual community. E-Communities are one sort of communication platform on the internet, and support or initiate business processes. They are used to build constant, self dynamic communication and interaction processes.

Net Economy: Refers to the commercial/business dimension of electronic data networks and is therefore a digital network economy. Different electronic platforms perform the execution of information, communication and transaction processes. The starting point for its expansion is the development of the information society. The basis of the Net Economy is formed by four technological innovations: telecommunication, information technology, media technology and entertainment (the so-called TIME markets). These innovations have, and continue to, significantly impact the possible ways in which information, communication and transactions are managed. The increased support of business processes using electronic systems takes centre stage here. There are a number of terms for this that can be identified (e.g. e-business, e-commerce, information economics, network economics), which can, to some degree, be used synonymously.

E-Marketplaces: Are virtual-based organizations to exchange services. An E-Marketplace has an institutional framework for transaction processes. They can be interpreted as virtual space where supply and demand is coordinated.

Netiquette: Is derived from the terms internet and etiquette. Despite the fact that every human being possesses the right to express an opinion on the internet, legal and ethical standards have to be obeyed. Sometimes those standards are violated, especially on anonymous web-based communication platforms. Comments with an extremist, offending, or sexually harassing content should not be tolerated by any individual or platform operator. Guidance for communication on the internet is given by the so-called netiquette. The recommended behavior of the netiquette is not legally binding, but helps to maintain and develop a positive net culture. The voluntary agreed upon rules are frequently incorporated in codes of conduct of platform operators.

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Table of Contents
Acknowledgment
In Lee
Chapter 1
Walter Distaso, Paolo Lupi, Fabio M. Manenti
In this chapter the authors provide evidence of the effectiveness of European National Regulatory Authorities in applying the basic principles of... Sample PDF
Static and Dynamic Efficiency in the European Telecommunications Market: The Role of Regulation on the Incentives to Invest and the Ladder of Investment
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Chapter 2
James E. Prieger, Daniel Heil
Regulatory policy in telecommunications must balance short-term efficiency (low prices) against the firms’ incentives to innovate, which have longer... Sample PDF
Is Regulation a Roadblock on the Information Highway?
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Chapter 3
Claudio Feijóo, José Luis Gómez-Barroso, Asunción Mochón
Wireless/mobile technologies are absolutely necessary for any agent who wants to participate in the new information and communication technologies... Sample PDF
Reforms in Spectrum Management Policy
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Chapter 4
Ricardo Gonçalves, Álvaro Nascimento
The deployment of Next Generation Access networks (NGAs) is likely to have a significant impact on the telecommunications’ value chain and... Sample PDF
Next Generation Access Networks and their Regulatory Implications
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Chapter 5
Carol C. McDonough
The United States’ wireless telephone industry has evolved from a minor segment of the communications industry to a major provider of voice, and... Sample PDF
The Impact of Government on the Evolving Market Structure of the U.S. Wireless Telephony Industry
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Chapter 6
Indrit Troshani, Sally Rao Hill
The adoption and diffusion of mobile services has achieved a spectacular growth in many countries around the world. However, regulators in these... Sample PDF
Shaping Regulation in the Australian Mobile Industry
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Chapter 7
Stefan Hüsig
This chapter covers an important issue in the area of telecommunications planning and technology management: The ex ante analysis of potential... Sample PDF
Analyzing the Disruptive Potential in the Telecommunications Industry
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Chapter 8
John B. Meisel, Timothy S. Sullivan
The local exchange telephone market is no longer considered to be a natural monopoly as a result of technological advancements. In particular, the... Sample PDF
Convergence of the Internet and Telecommunications
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Chapter 9
Moon-Soo Kim
Since 1986, the Internet has developed into a global network enabling users worldwide to connect to each other to exchange information and data. The... Sample PDF
International Internet Interconnection Service in Asia-Pacific Region
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Chapter 10
Dong Hee Shin
The purpose of this study is to examine cross-national data in order to identify possible factors related to the observable patterns of Mobile... Sample PDF
A Techno-Economic Analysis of Mobile Virtual Network Operators
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Chapter 11
Riku Laanti, Fred McDougall, Georges Baume
This chapter focuses on the internationalisation processes of national telecommunications companies (telcos) from small and open economies (SMOPECs)... Sample PDF
Evolving Value Networks and Internationalisation of National Telecommunication Companies from Small and Open Economies
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Chapter 12
Zulima Fernández, Belén Usero Sánchez
This chapter analyzes the role of non-market actions (NMAs) in the competitive position of firms in the European mobile telecommunications industry.... Sample PDF
The Effect of Non-Market Strategies in the Mobile Industry
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Chapter 13
Barney Warf
Fiber optics forms the pivotal telecommunications technology of the contemporary global economy, offering greater speed and security than other... Sample PDF
Spatiality and Political Economy of the Global Fiber Optics Industry
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Chapter 14
Hyun-Soo Han, Heesang Lee, Yeong -Wha Sawng
In South Korea, the home network industry has been the object of great expectations among the government and business community. Thus far, however... Sample PDF
Digital Convergence and Home Network Services in Korea: Part 1 - Recent Progress and Policy Implications
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Chapter 15
Hyun-Soo Han, Heesang Lee, Yeong -Wha Sawng
In this chapter, we proposed managerial implications and strategic alliance opportunities of the home network service providers in Korea. Based on... Sample PDF
Digital Convergence and Home Network Services in Korea: Part 2 – Business Models and Strategic Alliances
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Chapter 16
Brian Low, Wesley J. Johnston
Despite massive investment, few foreign firms doing business in China’s telecommunication sector can claim success. Such failures can be explained... Sample PDF
Mixing and Matching Organizational Network Legitimacy Practices to China's Telecommunication Market
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Chapter 17
Chin Wei Chong, Siong Choy Chong
This chapter aims to create a unified model capturing and generalising the different arrays of preliminary knowledge management (KM) implementation... Sample PDF
Preliminary Knowledge Management Implementation in the Telco Industry
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Chapter 18
Maria Major, Trevor Hopper
This chapter examines an implementation of an Activity-based Costing (ABC) system in a Portuguese telecommunications firm called Marconi. It is... Sample PDF
Activity-Based Costing in the Portuguese Telecommunications Industry
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Chapter 19
Antonios D. Kargas, Dimitris Varoutas
This chapter explains what organizational culture is and analyzes its importance for the management of any company. Organizational culture must not... Sample PDF
The Role of Organizational Culture to the Management of Telecommunication Companies: I. Background and Motivation
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Chapter 20
Antonios D. Kargas, Dimitris Varoutas
This chapter analyzes the importance of organizational culture through a set of strategies and enterprising practices in order to emphasize the... Sample PDF
The Role of Organizational Culture to the Management of Telecommunication Companies: II. Applications and Case Studies
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Chapter 21
Hannu Verkasalo
Many case examples in the mobile market have indicated that the success of mobile services (e.g. Internet browsing, email messaging or streaming... Sample PDF
Dynamics of Mobile Service Adoption
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Chapter 22
Moon-Koo Kim, Myeong-Cheol Park, Jong-Hyun Park
In communications services, the continued competitiveness and growth of a company depends vitally on customer value. In Korea’s maturing mobile... Sample PDF
When Customer Satisfaction Isn't Good Enough: The Role of Switching Incentives and Barriers Affecting Customer Behavior in Korean Mobile Communications Services
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Chapter 23
Jiayin Qi, Yajing Si, Jing Tan, Yangming Zhang
In the highly competitive environment, the real-time and dynamic customer demand analysis technology is required by the enterprise information... Sample PDF
Telecommunication Customer Demand Management
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Chapter 24
Jiayin Qi, Yuanquan Li, Chen Li, Yingying Zhang
This chapter proposes an integrated methodological system of telecommunication customer detainment management, including telecommunication customer... Sample PDF
Telecommunication Customer Detainment Management
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Chapter 25
Frédéric Morlot, Salah Eddine Elayoubi
We illustrate how a mobile data network operator can plan an upgrading investment to anticipate explosions of the demand, taking into account the... Sample PDF
How to Plan for an Upgrading Investment in a Data Network?
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Chapter 26
Georgios N. Angelou, Anastasios A. Economides
Recognizing the inadequacy of traditional quantitative cost-benefits analysis for evaluating telecommunications investments, researchers suggest... Sample PDF
Telecommunication Investments Analysis: A Multi-Criteria Model
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Chapter 27
Rebecca De Coster
Mobile networking refers to wireless technologies which provide communications between devices. Applications for mobile networking have a broad... Sample PDF
A Business Planning Framework for WiMAX Applications
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Chapter 28
Nicoletta Corrocher, Roberto Fontana, Claudia Parlanti
We provide evidence on the determinants of diffusion of Voice over IP (VoIP) applications in a sample of public and private organizations in Italy.... Sample PDF
Adoption of VoIP Applications in Public and Private Organizations
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Chapter 29
Richard A. Gershon
Today, innovation is much more about much than just developing new products. It is about reinventing business processes and building entirely new... Sample PDF
Intelligent Networking and Business Process Innovation: A Case Study Analysis of Home Box Office and Dell Computers
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Chapter 30
Stan Kurkovsky
Mobile commerce is a special area of electronic commerce that utilizes mobile wireless devices to conduct commercial transactions. Unique features... Sample PDF
Can M-Commerce Benefit from Pervasive Computing?
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Chapter 31
Katalin Tarnay
The purpose of this chapter is to provide a simple understandable approach to the basics of telecommunications management. This chapter is composed... Sample PDF
Basics of Telecommunication Management
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Chapter 32
Katalin Tarnay
In this chapter, the fundamentals of communication protocols are presented, and then a special application area, the telecommunications management... Sample PDF
Telecommunication Management Protocols
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Chapter 33
Marc St-Hilaire, Samuel Pierre
The cellular industry is evolving at a very fast pace. In fact, cellular networks have experienced significant changes over the last few years. In... Sample PDF
Cellular Network Planning: Evolution from 2G to 4G
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Chapter 34
Faouzi Kamoun
IP network connectivity is becoming so important for business that it is being compared today to basic utilities, such as water and electricity. As... Sample PDF
IP Address Management: Challenges, Solutions and Future Perspectives
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Chapter 35
Ran Wei, Zizhong Zhao
This chapter focuses on digital cable TV networks as a convergent network with telecommunications networks and the Internet that provides... Sample PDF
Digital Cable TV Networks: Converging Technologies, Value-Added Services and Business Strategies
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Chapter 36
Tobias Kollmann, Christoph Stöckmann, Carsten Schröer
The diffusion of a Web 2.0 product or services is, unlike to traditional consumer or industrial goods, not only based on purchase. Full acceptance... Sample PDF
Diffusion and Oscillation of Telecommunications Services: The Case of Web 2.0 Platforms
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Chapter 37
Phillip Olla
A fundamental goal of the wireless industry is to economically offer ubiquitous broadband access to a large number of people in diverse geographical... Sample PDF
The Diffusion of WiMax Technology: Hurdles and Opportunities
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Chapter 38
David Bell, Sunil Hazari
VoIP is the use of Internet protocols to provide telephone services that have previously been delivered over traditional telephone networks.... Sample PDF
VoIP Quality and Security Issues for Consumers and Small Businesses
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Chapter 39
S. S. Manvi, M. S. Kakkasageri
This chapter presents the emerging security issues in Vehicular Ad hoc Networks (VANETs) for e-business along with some of the solutions provided by... Sample PDF
Emerging Security Issues in VANETS for E-Business
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Chapter 40
Sotirios K. Goudos, Angeliki Z. Agorogianni, Zaharias D. Zaharis
Network planning and management in a large organization such as a university, is a complex task. A large university is an inherently demanding... Sample PDF
Telecommunications Network Planning and Operations Management in an Academic Environment: The Case Study of the Aristotle University of Thessaloniki
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Chapter 41
Károly Farkas, Csaba A. Szabó, Zoltán Horváth
The objective of this chapter is to discuss the applications, state-of-the-art technologies, planning methods and business models for wireless... Sample PDF
Planning of Wireless Community Networks
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Chapter 42
David Golightly
Technology has to be fit for purpose in order to deliver its promised business impact. An important component of this is making sure technology... Sample PDF
Human Factors for Business Mobile Systems
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Chapter 43
Mohamed Boucadair, Pierre Levis, Pierrick Morand
IP networks are the federative transport networks for a large set of emerging services. These services demand hard guarantees in term of the service... Sample PDF
Towards QoS-Inferred Internet
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Chapter 44
Mirko Luca Lobina, Luigi Atzori, Fabrizio Boi
IP Telephony provides a way for an enterprise to extend consistent communication services to all employees, whether they are in main campus... Sample PDF
The Playout Control Management: An Issue for the IP Telephony Service Providers
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Chapter 45
Nikolaos D. Tselikas, Georgia M. Kapitsaki, Dimitrios G. Makris, Iakovos S. Venieris
The role of open Application Programming Interfaces (APIs) and protocols for advanced service provisioning and the corresponding state of the art... Sample PDF
Open APIs and Protocols for Services and Applications in Telecoms
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Chapter 46
Lisandro Zambenedetti Granville, Ricardo Neisse, Ricardo Lemos Vianna, Tiago Fioreze
The management of telecommunication and data networks has been based on standards defined in historical contexts quite different than the current... Sample PDF
On the Management Performance of Networked Environments Using Web Services Technologies
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Chapter 47
Raquel Barco, Pedro Lázaro
In the near future, several radio access technologies will coexist in Beyond 3G mobile networks (B3G) and they will be eventually transformed into... Sample PDF
Automated Fault Management in Wireless Networks
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Chapter 48
Cajetan M. Akujuobi, Nana K. Ampah
Most of the existing networks (e.g., telecommunications, industrial control, enterprise networks etc.) have been globally connected to open computer... Sample PDF
Modeling Intrusion Detection with Self Similar Traffic in Enterprise Networks
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Chapter 49
Dimitris Kanellopoulos
This chapter presents high-speed networking technologies and standards such as Asynchronous Transfer Mode (ATM), Fast Ethernet, 10 Gigabit Ethernet... Sample PDF
High-Speed Multimedia Networks: Critical Issues and Trends
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Chapter 50
J. Joaquín Escudero-Garzás, Ana García-Armada
The goal of this chapter is to introduce the novel concept of cognitive radio (CR) for wireless telecommunications. Cognitive radios are a new type... Sample PDF
Emerging Telecommunications Technologies: Cognitive Radio
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Chapter 51
J. Joaquín Escudero-Garzás, Ana García-Armada
The aim of this chapter is to address the role of a novel concept in wireless telecommunications: Game theory. Game theory is a branch of applied... Sample PDF
Game Theory for PHY Layer and MAC Sublayer in Wireless Telecommunications
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Chapter 52
S. S. Manvi, L. B. Bhajantri
This chapter brings out various issues in M-Commerce and describes various agent-based product negotiation models in mobile commerce environment.... Sample PDF
Agent Based Product Negotiation Models in Mobile Commerce
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Chapter 53
James M. McKinion
Precision agriculture has been made possible by the confluence of several technologies: geographic positioning systems, geographic information... Sample PDF
Role of Telecommunications in Precision Agriculture
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Chapter 54
Franz Hartleb, Gerhard Haßlinger, Sebastian Kempken
An ongoing challenge in telecommunication is the integration of a variety of services on broadband access platforms at increasing transmission... Sample PDF
Network Planning and Dimensioning for Broadband Access to the Internet Regarding Quality of Service Demands
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Chapter 55
Gerhard Haßlinger
Service and content delivery over the Internet is currently supported by overlay architectures of different types. There is a trend towards... Sample PDF
Overlay Networks: New Techniques for Global Service and Network Provisioning
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Chapter 56
James Salter, Nick Antonopoulos
Distributed Hash Tables (DHTs) have been used in Peer-to-Peer networks to provide query lookups in typically O(log n) messages whilst requiring... Sample PDF
Optimising P2P Networks by Adaptive Overlay Construction
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Chapter 57
Susan J. Chinburg, George Scheets
The network carrier must utilize the full potential of existing physical infrastructure before any new investments can be considered. Much work has... Sample PDF
Designing a New Service Overlay on a Carrier Network Using the Efficient Frontier
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Chapter 58
Mohamed Zaki, Salah Ramadan
The cellular principle is an effective way to guarantee efficient utilization of the offered radio band. Although PCS networks use the cellular... Sample PDF
Combining Small and Large Scale Roaming Parameters to Optimize the Design of PCS
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Chapter 59
Kaiqi Xiong, Harry Perros
This chapter considers a set of computer resources used by a service provider to host enterprise applications for customer services subject to a... Sample PDF
Secure Resource Optimization in Distributed Service Computing
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Chapter 60
Jadranka Skorin-Kapov, Darko Skorin-Kapov
Due to the enormous proliferation of internet traffic, including video on demand and transfer of datarich documents, the use of optical networking... Sample PDF
Trends, Optimization and Management of Optical Networks
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