But eBay was never able to mount a credible threat and ended up pulling out of the market. In Japan, worldwide auction leader eBay showed up just five months after Yahoo! launched its Japanese auction service. Being first allows your firm to start the network effects snowball rolling in your direction. In the world of network effects, this is a biggie. For large firms with well-known followers, make preannouncements (Microsoft).For incumbents, constantly innovate to create a moving target and block rival efforts to access your network (Apple’s efforts to block access to its own systems).For rivals, be compatible with larger networks (Apple’s move to Intel Live Search Maps).Maintain backward compatibility (Apple’s Mac OS X Rosetta translation software for PowerPC to Intel).Encourage the development of complementary goods-this can include offering resources, subsidies, reduced fees, market research, development kits, venture capital (Facebook fbFund).Seed the market with complements (Blu-ray Nintendo).Establish distribution channels (Java with Netscape Microsoft bundling Media Player with Windows).Form alliances and partnerships (NYCE vs.
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