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Information Systems Facebook Analysis

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In chapter 2 (p. 45, 3rd paragraph, line 1) the authors state, “Innovative use of a firm’s information resources can provide companies with substantial and sustainable advantages over competitors.” However Carr (2003) in his classic article, “IT Doesn’t Matter” makes the following assertion “IT is a commodity that does not offer a competitive distinction and therefore does not provide a competitive advantage.”

More recently in February 2014 Facebook purchased WhatsApp for $ 19 billion. Earlier they had purchased Instagram in 2012 for $1 billion. Similarly in 2011 Google (now Alphabet) acquired Motorola’s cell phone business for $12.5 billion and in June 2013 Google (Alphabet) paid $1.1 billion to purchase social mapping startup Waze. This acquisition, the 10th acquisition for Google (Alphabet) in 2013, allowed the company to become a dominant player in online maps.

What do you think and why; does Facebook’s and Google’s (Alphabet's) acquisition of other companies provide it with sustainable competitive advantage? As you form your thoughts about this question think of the ecosystem in which Facebook and Google (Alphabet) function and see how module 1 materials can be applied to answer this question.

Video application advances in social media over the last 12 months is such a great example of the hypercompetition in a marketplace that Pearlson and Saunders refer to in our textbook (1). From the quick evolution of Meerkat, to Twitters $100 million acquisition of Periscope, to Facebook’s soon to be entrance into the market, it is interesting to watch all of this unfold as we are studying this specific topic.

Looking specifically at Twitters acquisitions of Periscope is particularly interesting because it remains so consistent with what Carr wrote about in “IT Doesn’t Matter” (2). Twitter allowed other startups to develop and

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