The Networked Economy: Information Management,
Strategy, and Innovation
网络经济:信息管理, 战略, 和创新
(1)
Overview:
From Enterprise Software
to the Digital Networked
Economy
纵览：从企业软件到网络经济
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Andreas S. Weigend, Ph.D. 韦思岸教授
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What is the Digital Networked Economy?

Digital: Convergence
Everything digital: Universal, ubiquitous.
Storage free: Cost of finding /discovering dominates.

Networked: Communication
Everything connected: Internet of Things.
Communication free: Cost of interrupt dominates.

Economy: Collaboration

Classical economics (pricing of information goods, networks effects,…)

Behavioral economics (incentive design,…)
Internet of People
New business models for the digital networked economy
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What is this course about?
•
Enabler

•
Communication and data revolution
Impact

With the quantitative and qualitative data sources now available, companies
have the potential to create unprecedented internal transparency and value for
their customers.
Examples?
Other groups?
•
Implications

For old and new business models

For products

For services
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What are some applications?

Personalization

Recommendations

Online marketing

Collective intelligence

Peer-production

Enterprise 2.0
More examples?
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Course structure (2 days March 2008, Tsinghua/INSEAD)
•
1) Enablers of the Digital Networked Economy
Discuss the mechanics and principles behind communication platforms, social networks
and marketplaces of the digital networked economy, explaining how and why they have
fundamentally shifted the dynamics of business.
Focus on the evolving role of enterprise software and IT strategy in the context of
these new information possibilities, including collective intelligence and enterprise
2.0.

Overview

Themes of the course

Enterprise software and IT Strategy

Readings
Carr: IT Doesn’t Matter
Ross & Weill: Six IT Decisions Your IT People Shouldn’t Make
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Course Structure (Day 1 Afternoon)
•
2) Quantifying the business: Creating transparency
“Don’t call me Jack Ma, call me Data Ma!” the CEO of Alibaba proclaimed at the 2004
Anniversary of the company, to emphasize the impact of quantifying and instrumenting
the organization, as opposed to basing business decisions on beliefs and opinions.
Present the underlying principles: first establish a set of metrics that reflect business
goals, then create an experimental framework to evaluation innovative ideas with low
risk.
Discuss some implications on the structure of the organization.

Data and Metrics

Experiments and Actions

Getting it done in your organization
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Course Structure (Day 2 Morning)
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3) Pricing and Scarcity in the Digital Networked Economy
Review traditional pricing approaches and the properties of information goods
Discuss pricing strategies for products and services with network effects and switching
costs.

Pricing information goods

Markets

Attention Economy

Discussion: Chris Anderson “FREE” (March 2008)
If in the future everything on the web is free, how will companies make money? It is
not the economics of pricing that has changed, but that the initial concept of placing
an artificial scarcity on digital goods was flawed.
What will be the marketplaces of the attention economy with new monetization
models.
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Course structure (Day 2 afternoon)
•
4) Feedback Marketing: Truly engaging users
The traditionally high development costs and long intrinsic time scales of research and
testing lead to the four P’s of marketing (product, placement, pricing and promotion).
The new ways of collecting consumer feedback and opinions are dramatically reducing
cost while increasing effectiveness of marketing.
This lead to the shift from traditional marketers pushing advertising, to modern
consumers wanting to discover items they are genuinely interested in, often via other
individuals.

From push advertising to serendipitous discovery

Search engine optimization

The New Consumer Data Revolution

Group exercise
We are witnessing a New Consumer Data Revolution with widespread implications for
both established companies and startups, individuals, and society.
We will end the course by designing concrete first steps towards leveraging this
revolution for your company
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Reflection paper topics
1.
Should your company create an outward facing blog? Should you open up
your website such that anybody can discuss your product and service?
2.
Is it true that according to Chris Anderson’s March 2008 WIRED article
everything will be free? If that is the case, how will people make money?
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Additional readings

Available online at http://weigend.com/files/teaching/tsinghua/readings/
MaEconomist2008.doc (1 page)

Outlook of the CEO of Alibaba for 2008
OReillyWeb2DesignPatterns.doc (1 page)

One-page summary of Web2.0
DeightonKornfeldHBS2007.pdf (HBS)

Discussion of consequences of digital interactivity for markets, marketing and consumers
WeigendFOCUS2004-en.pdf (5 pages)

Background interview on the instructor
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Andreas S. WEIGEND, Ph.D.
韦思岸博士

Education
教育背景
Undergraduate: Karlsruhe, Bonn, Cambridge (UK)
本科：卡尔斯鲁厄，波恩，剑桥（英国）
Graduate: Stanford University (Physics Ph.D.)
博士：斯坦福大学（物理学）

Past full-time positions include
全职工作经历
New York University, Associate Professor of Information Systems (1997-2000)
纽约大学，信息系统副教授
Amazon.com, Chief Scientist (2002-2004)
亚马逊网站，首席科学家

In China since 1994
Advising includes Alibaba, XiaoNei, Yobo, as well asworking with Venture Capital
Teaching: Tsinghua, CEIBS, Shanghai Jiao Tong University, Cheung Kong GSB
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Andreas S. WEIGEND, Ph.D.
韦思岸博士

Consulting
咨询
Clients: Large multinationals, small startups (US, Germany, China), venture capital
客户：大公司，小型新兴企业（美国，德国，中国），风险投资

Teaching (2007-2008)
教职
Tsinghua EMBA and Tsinghua/INSEAD (Information Management)
清华大学EMBA课程，清华大学与法国INSEAD管理学院联合课程（信息管理）
Stanford University (Data Mining and E-Business)
斯坦福大学（数据挖掘和电子商务)
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The Production Team
团队

Teaching Assistance
LI Hongyan
李虹燕


Interpretation

Andreas S. WEIGEND, Ph.D.
韦思岸博士
US 美国
+1 650 906-5906
Jessica GONG Haiyan
龚海燕
China 中国
+86 13818183800
Jerry YU Xueqing
于雪晴
Germany 德国
+49 174 650 906-5906
Operations
ZHANG Bocheng
张博晨

Class manager
Lily JIA

Design
LIU Jun
刘君
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E-business
电子商务

Definition of e-business
定义
Communicate and transact through the web and mobile devices
利用网络和移动通信设备，完成沟通与交易

Enabler: Technology
基础：技术
Internet: Network (connection between computers), and protocol
互联网：网络（将电脑相连）和传输协议
Internet : Perhaps the largest infrastructure shift that has ever happened
互联网可能是有史以来最重大的基础设施改造。

Ability to transport energy  Industrial revolution
传输能源  工业革命

Ability to transport information  Information revolution
传送信息  信息革命
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Decision making: Transparency through data
决策：通过数据增加透明度

Measure, measure, measure.
测量、测量、再测量


“You can’t manage what you don’t
measure”
无法测量则无法管理
“What gets measured gets results”
只有测量才有效果
Making airlines arrival delays public
航空公司误点记录
Online marketing
网络广告

Goal: Base decisions on
transparency…
目标：基于透明度做出决策

… not on blind faith or gut feeling
而非盲从或感觉
Pass transparency on to your
customers
向客户展示透明度
E.g. EMS providing access to
information of location of package
联邦快递让客户查询包裹递送位置
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Digital goods
数字商品

Digital convergence
数字聚合
Economics: Positive feedback
经济学：正反馈
Scale: Opportunity and threat
规模：机遇和威胁
Textbook (Information rules / Network
economy): Chapter 1-3, 5-7
教材《信息规则/网络经济》第1-3章，第5-7章
•

Case: Reasons for Microsoft’s
monopoly
案例：微软如何垄断
Lock-in
客户锁定
Network effects
网络效应
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Overview: Markets
纵览：市场

Build platform: Empower others to contribute
构建平台：人人参与，一起作贡献
To be authors, reviewers, designers, buyers, sellers…
人人成为作者、评论家、买家、卖家…

Discussion
讨论
Pricing of goods
商品的价格
Pricing of the service
服务的价格

Pay for participation, pay for listing, pay for successful transaction, additional services
基于参与程度、列表位置、成功交易、或额外服务等付费
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Overview: Customers
纵览：消费者

Imperative: Crave for feedback
规则：反馈制胜
Close the feed-back loop, and learn from it. On internet time. Fast. Almost instantaneous.
抓住反馈，并分析它。网络上的时间，几乎稍纵即逝。
E.g., Market research
如：市场调研

Technology (and economics) drives, society (and regulation) follows.
技术（和经济学）领头，社会（法规）紧跟。
Global
全球化

Dramatic changes in behavior and attitude of the customers
消费者行为和态度的巨变
E.g., Attitude to information, (perceived) right of access to information
如何看待信息、知情权

Attention
关注

Trust
信任
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User
Advertising Network
Advertiser
Publisher
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Business model
广告网络的经营模式
Advertising Network
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Overview: Innovation
纵览：创新

Ability to experiment. And rigorously verify.
能够进行试验，并严格论证。
Example: A/B test.
如：A/B 测试

Communication: Always-on society.
沟通无限：随时互联
Communication is cheap. Storage is free: Creativity is a key ingredient of business.
通信便宜，存储免费：创意成为商务要素。
Focus on actionability : Do the relevant things.
付诸行动、更有针对。

Web 2.0: Read-write web
Web 2.0开创读写双向的网络时代
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Knock knock… who is it?
敲敲…这是什么？

Cookie
Place on computer’s hard drive by DoubleClick
由DoubleClick公司存储在电脑硬盘上
Example:
例如：
andreas@doublecklick[1].txt
id
8000001037e7b9c
doubleclick.net/
1024
406055296
31593874
2329093264
29461891
*
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How does it all happen?
具体步骤？


8 steps:
分8步：
1.
Browser comes to at a website (using browser)
浏览者来到网站（用浏览器）
2.
Website tells advertising network about the visitor
网站告诉广告网络哪个用户来了
3.
Advertising network checks whether computer has its cookie
广告网络检查该电脑是否已有cookie
4.
If yes, it looks it up in its database
如有便查询数据库
5.
It then applies business rules to decide what ad to serve
再根据商业规则决定让用户看到哪条广告
6.
It inserts this ad into slot on the website
将此广告插入网站相应位置
7.
The ad appears on the computer….
广告出现在用户电脑上
8.
…and hopefully has a positive influence on the user’s future purchasing behavior
当然希望会积极影响该用户未来的购物行为
This needs to happen very quickly
速度取胜
Requires significant infrastructure investments
需要大力投资于基础技术
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Cookies: Value Propositions
Cookies的价值所在

Advantage for company that puts cookie on user’s computer:
公司将cookie储存在用户电脑上所带来的好处
Know when this computer users returns to the web site
知道何时同一用户又回到同一网站


Marketing etc
营销等应用
Advantage for user:
给用户带来的好处：
Convenience
使用方便


E.g., automatic log-in
可自动登录网站

E.g., more useful ads
看到更有针对的广告
Disadvantage for user:
给用户带来的坏处
Privacy can be jeopardized
隐私可能受到侵犯
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Trade-off: Privacy vs Convenience
取舍：隐私还是便捷

Who owns the data?
谁拥有数据？
Phone calls on phone
用电话拨打电话
Web searches
在网站上搜索
Purchases
购买
Movement (GPS, mobile)
移动（全球定位系统，手机）

Note:
注：
The trade-off between convenience
and privacy is intrinsic, cannot be
avoided
使用便捷与隐私保护之间必然存在权衡
取舍

More convenience, less privacy
方便增多，隐私减少

Less convenience, more privacy
方便减少，隐私增多
…
等等
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Market capitalization 2007.03 (in parenthesis: 2006.05)
2007年3月市值(附带2006年5月市值）
EBAY eBay: 43 (was 51)
MSFT Microsoft: 272 (was 270)

YHOO Yahoo: 42 (was 50)


GM General Motors: 17 (was 20)
GOOG Google: 140 (was 78)

AMZN Amazon: 16 (was 14)


in $ billion
100 单位：10亿美元
Platforms
平台
10
1
Physical products
实物产品
Information products
信息产品