8 February 2005

Walled Gardens and Network Effects

Phil Windley's newly named Technometria blog has an interesting repost Walled Gardens and Network Effects.
I originally linked to a posting by him in an earlier post on my own blog.


"Walled garden" is the term that industry uses for online communities that capture users inside a Web that is anything but world-wide. The services inside the walled garden are the ones the service provider chooses and they almost always involve increased revenue for the service provider. When I was at Excite@Home, we had a project to build set-top boxes for our cable partners that included a cable modem, but kept subscribers who didn't sign on for broadband services inside a walled garden of for-pay services. The idea of walled gardens is far from dead. You live with them everyday on your cell phone. I hardly ever use the network services on my ATT cell phone because it's all about shoving ringtones and wallpaper down my throat rather than letting me easily get to the information that I need.

In the Sept 16 issue of the Gillmor Gang (see www.gillmorgang.com), Ray Ozzie, of Notes and Groove fame, talks about how hard it is to create collaborative environments for portable devices. As noted by Ozzie, the operating systems on portable devices are too fractured and the interactions too limited to support network effects. By network effects, Ozzie is referring to the phenomenon that we frequently notice with social systems where the network of users grows geometrically because of user interaction. The applications being built for mobile devices are mostly used for personal productivity, not collaboration. The problem is that each mobile provider is trying to capture customers and create lock-in for their network instead of maximizing utility for users.

Posted by mofoghlu at February 8, 2005 5:13 PM | TrackBack