"What’s Your Google Strategy?" by by Andrei Hagiu and David B. Yoffie, from the April 2009 issue of Harvard Business Review, talks about the power of multi-sided platforms, how to play with MSPs, how to extract value, when to build your own and when to partner with an existing platform. Google, Amazon, eBay are all examples of multi-sided platforms. MSPs are intermediaries that interject themselves between your customer and you, and provide some value of course. Amazon for example connects publishers, book sellers, and customers. Microsoft Windows connects consumers, application developers, and PC makers, and thus is a three-sided platform. Using the examples of Amazon and ToysRUs, LinkedIn and Google's OpenSocial, Electronic Arts and Microsoft XBox, and others, the authors illustrates the potential of MSPs to encroach on the turf of their partners and how these relationships can quickly sour in the absence of a good understanding of potential conflicts of interest down the road.
MSP relationships can turn sour if the MSP decides to raise prices, or vertically integrate ("embrase and extinguish" strategy as Microsoft has been accused of practicing), or by simply luring away your customers since the customer sees the MSP more than he sees you.
Four star article. Reasonably well-written, but falls prey to the lure of using the word 'Google' in its title to attract more eyeballs than would be with a title like 'Working With Multi-Sided Platforms'. A second star docked for this chicanery.
© 2009, Abhinav Agarwal. All rights reserved.
