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Summary: AGE-OLD RULES, ADAPTED TO THE NEW ECONOMY !
Review: By now, all the "New Economy" arrogance should have gone out the window along with the Nasdaq's performance. Apparently, the old economic rules still apply and that's the unspoken message of this thought-provoking book. Shapiro et al. show you how to adapt the old information rules to the new communication and broadcasting medium that is the Internet. This is an invaluable guide for everybody in the Information Service sector (information vendors etc...), refreshingly devoid of all the tech hype and other nonsense that plague many of the recent "how to" books.
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Summary: Monarch of the Early-21st Century
Review: Those in need of a strategic guide to the network economy will find a wealth of valuable material in Information Rules, co-authored by Carl Shapiro and Hal R. Varian and published by Harvard Business School Press. The titles of its ten chapters suggest the nature and extent of subjects covered: The Information Economy, Pricing Information, Versioning Information, Rights Management, Recognizing Lock-In, Managing Lock-In, Networks and Positive Feedback, Cooperation and Compatibility, Waging a Standards War, and Information Policy. In effect, Information Rules combines all of the benefits of an operations manual with the counsel of two renowned experts who accompany the reader, step by step, through the manual.According to the authors, the thesis of their book is that "durable economic principles can guide you through today's frenetic business environment. Technology changes. Economic laws do not. If you are struggling to comprehend what the Internet means for you and your business, you can learn a great deal from the advent of the telephone system a hundred years ago." That's true. The interdependence of information (software) and infrastructure (hardware) will always be important, indeed imperative. Therefore, interconnection battles are won only if, for example, local telephone companies in 1900 were interconnected with Bell to provide long-distance service and, 100 years later, browsers are interconnected with operating systems. The authors "use the term information very broadly. Essentially, anything that can be digitized -- encoded as a stream of bits -- is information." However, Information Rules focuses on models, not trends; concepts, not vocabulary; and analysis, not analogies. Recall the previous reference to "durable economic principles." Trends come and go, as do vocabularies; therefore, today's brilliant analogies may well make no sense tomorrow, or even later today. Hence the necessity of durable principles, principles which continue to guide efforts to anticipate and then manage what Peter Drucker has called "the consequences of what has yet to occur." The Chinese character for "crisis" has two different meanings: peril and opportunity. The title of Information Rules can also be interpreted in two different ways: rules of principle and rules of dominance. In a Darwinian sense, those who dominate the Information Age will be those who apply the right principles. What do Shapiro and Varian suggest? With regard to the pricing of information, the subject of Chapter 2, they suggest two strategies: don't be greedy and play tough. The "lessons" to be learned are to personalize your product and personalize your service, "know thy customer", differentiate your prices when possible, and use promotions to measure demand. Indeed, at the end of each chapter, they summarize "lessons" to be learned after having suggested specific strategies to apply them. In the "Further Reading" "Bibliography" sections which conclude Information Rules, Shapiro and Varian direct the reader to various sources to which they referred previously. Who will gain the greatest value from this book? Owners/CEOs of small-to-midsize companies which are struggling to decide what to do...and what not to do...with opportunities created by the Internet and, more specifically, the WWW. Also, senior-level executives of much larger organizations (both for-profit and not-for-profit) who must formulate long-term strategies to achieve sustainable prudent growth. For thousands of years, there has never been a shortage of available information but until the printing press, access to it was severely limited. Since then, a variety of media have broadened and deepened that access and, indeed, the volume of available information has increased exponentially. According to Shapiro and Varian, the challenge today is not one of access; rather, the challenge is to follow certain "certain durable principles" on which effective strategies are based. No one knows precisely how and to what extent the network economy will change in years to come. Principles which endure are those which accommodate change, whenever it occurs, whatever it proves to be. Shapiro and Varian suggest what those principles should be. Information Rules is a stunning achievement.
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Summary: Good but Webonomics is better
Review: This book is a very timely and well-written. The authors are dead-on in their analysis of the current state of the Internet and "Information" markets in general. The authors apply the concepts of economics to the Net and give the reader a clear framework to understanding the future trends of these markets. The authors, however,could have made the book 100 pages shorter by eliminating some of the redundant examples and cutting down some repetitive material. Overall, I would recommend the book but given a choice I would read Webonomics by Evan Shwartz first.
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Summary: A very incomplete view of the network economy
Review: Shapiro & Varian do a great job of explaining how the fundamental principles of economics are still relevant, even in the new network economy. They apply standard principles from the micro-economics theory of appropriate firm conduct to the special contingencies of information economy firms. They make quite modest claims for their efforts, acknowledging that "it depends" must be the answer to most questions about what firms should do, in the face of the new contingencies. My disappointment with the book stems from their choice of cases. Almost all of their extended examples involve the very largest firms operating in the American economy: e.g. Microsoft, IBM, Sony, AT&T, and Sun Microsystems. They have chosen mostly firms from the Fortune 1000, firms that have strategic planning departments, deep pockets, and access to highly paid consultants. But, the very essence of the new information economy is entrepreneurship -- the creation of 1000s of startups that are poorly capitalized and begin with not much more than a founding teams' vision of what they might become, if they are lucky. The pioneers in the new economy were firms like Osborne and Visi-calc, NOT IBM and AT&T. When an accurate economic history of the past several decades is written, it will emphasize the 1000s of experiments represented by struggling startups to make their mark, not the maneuvers of the largest & most powerful firms that arrived late at the party. "Assume you are a large firm" seems to be the operating assumption of Shapiro and Varian, rather than a realistic appraisal of the true size and power of the thousands of firms constituting the real infrastructure of the new economy. Where are all the failures? The bankrupt firms? The strategic mis-steps that cut down many firms in their infancy? E.g where's Psuedo Networks? Case studies of information goods' firms that didn't make it would have lent an aura of reality to sn otherwise blandly optimistic book.
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Summary: What a Wichita State Student Thinks
Review: I'm not an economist, so I really appreciate how the authors breakdown all the concepts into laymen's terms. And my instructor seems to like this book, so I'm stuck reading it--so I might as well get some good out of it.
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Summary: If you haven't read Kevin Kelly's "New Rules " , read this
Review: At the very begining, I found this book wonderful. I wrote a letter to an editor, urging him to translate this marvel into french. And I did translate the book into french. Then I read a lot of stuff about the new economy. And I found myself into trouble. May be they were wrong, may be Kelly is right, may be the rules have changed. But then I came back to the book. I read it again. And again. And I think it is a wonderful book. Simple, modest, and full of economic truth. Everyone who really want to UNDERSTAND (not to pretend) should read it.
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Summary: Not worth buying
Review: Frankly, if you already have a minimal culture in economics, you do not need this book : it takes far too long to say obvious and basic things.
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Summary: Cutting-edge Economics for the Internet Age? NO!
Review: I expected a great cutting edge book consistent with some of the type of thinking espoused in the business mags such as Fast Company & Business 2.0. What I found instead was an attempt by authors who didn't really understand internet evolving commerce. To cite a couple of instances: page 3: "You must price your information goods according to consumer value, not according to your production cost." In actuality, what you want to do is price your information goods in such a way as to build a base of customers with repetitive loyalty that will then allow for multiple additional marketing revenue. On page 6: "Image is everything in the information biz, because it's the image that carries the brand name and the reputation." That should've been worded: "Image is important but content ultimately is king- content drags eyeballs which create new opportunities". More- page 8: "Likewise, computer software is valuable only because computer hardware and network technology are now so powerful and inexpensive". In reality, software has always been a boon in that it allows for greater productive efficiencies. One more example (this led me to stop reading the book): page 9- "What is truly new is Home Depot's ability to re-order items from suppliers using electronic data interchange, to conduct and analyze cross-store demand studies based on pricing and promotional variations, and to rapidly discount slow moving items, all with minimal human intervention". In fact of matter, all of the aforementioned was able to be done prior to the internet- what Home Depot did was revolutionize selling by creating a sector store, total inventory, low price and knowledgeable people model that had not been done before. A final thought: I gave this book two stars because, after deciding not to read the entire book due to the disappointment of the first nine pages, I skimmed the rest and realized that despite the misleading title, the book DOES have merit as an elightned text on ways to conduct aggressive modern business methods. My biggest disappointment though, is the misleading title; I was all set, looking foward to reading how the information age plus the internet would rule the world- unfortunately, this book is not about that.
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Summary: The rules are the same !
Review: There is a lot of confusion these days in terms of trying to define the rules of success in the new economy. One thing for sure is that the pace of change we are experiencing today is unprecedented and can be ignored at our own peril. But amazingly, the rules of the game have not changed - as argued so powerfully in this book; the pace of the game has increased and it requires greater speed and agility to keep playing. But if the rules are the same and the pace has increased what about the playing field? Well, it is turning bigger and a player who wants to be in the game should know every inch of it. The main theme of the book centers on the concept that while we may adopt new strategies in the information economy the fundamental economic principles still apply. The goods that we are dealing with are information goods that are costly to produce and cheap to reproduce. In such a scenario, what are the cost characteristics, pricing strategies and market structures? Similarly the concepts of Versioning, Rights management, Lock-in, Networks & positive feedback are analyzed in great detail with appropriate illustrations and cases. Highly recommended.
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Summary: Some parts worth reading, but the book is not worth buying.
Review: Although many analysis of the information age is related to the new economy, but the entire layout of the book is not that good, and some economic concepts and strategies were so obvious that I think is common sense to many of the business people in the e-economy.
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