Subject: Re: economic efficiency of free software
From: Tim O'Reilly <tim@oreilly.com>
Date: Mon, 9 Feb 2004 10:17:10 -0800


On Feb 9, 2004, at 8:32 AM, L Jean Camp wrote:

> On Friday, February 6, 2004, at 10:57 PM, Stephen J. Turnbull wrote:
>
>> An elementary exercise: applying this idea, why is Amazon.com
>> successful (at least in terms of revenues, I dunno their P&L)?
>
> Because they have chosen to target a small number of books and  
> function as a organizational node for speciality book sellers and  
> purchasers. You appear to be implying it is because they are willing  
> to carry almost infinite inventory but they had a change in strategy.

But BN.com and others have the same inventory, and the same information  
from publishers.  Amazon in fact does not target a small number of  
books.

What makes Amazon successful is actually something that is very similar  
to what makes Linux successful:  the buy in and involvement of their  
customers.   What distinguishes Amazon from their competitors is that  
they have a critical mass of reviews, ratings, listmania lists, and  
people pointing to the site for their associates commissions.  In sum,  
Amazon has created an "architecture of participation" that makes the  
site richer the more people use it.

This is a big part of my current stump speech, "The Open Source  
Paradigm Shift".  I've been saying for years that we need to get beyond  
the exclusive focus on licensing as the litmus test for open source,  
and look at all of the other aspects, in particular, the way that  
systems can be designed to create participation.

There are a set of overlapping factors in the success of open source  
software.  Unless we tease them apart, we aren't going to learn from  
other, related successes.
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