From Dellarocas, C., Katona, Z., & Rand, W. (2013). Media, aggregators and the link economy: Strategic hyperlink formation in content networks. Management Science, 59 (10), 2360-2379.
In today’s link economy, whether a blogger paraphrases news articles or a fully automated aggregator harvests content from across the web, the pathways between content producers and audiences have become increasingly complex. So how should content producers respond to competition from aggregators and from each other?
How should content producers respond to competition from aggregators and from each other?
A new study from Boston University School of Management’s Chrysanthos Dellarocas, professor of information systems and director of Boston University’s Digital Learning Initiative, together with Zsolt Katona (University of California at Berkeley) and William Rand (University of Maryland), is the first to model the complex, interrelated implications of strategic hyperlinking and investment in content production. Their analysis, demonstrating scenarios in which such links can boost everyone’s profits, thus yields important implications for professional content producers who have until now been reluctant to link to competitors.
When Linking Increases Profits
Addressing questions relevant to both firms and regulators, Dellarocas et al. identify gaps in existing network economics research around the impact of freely established links and the strategies that motivate their formation. For example, what are the effects of linking to competitors, and when should inbound links be refused?
Dellarocas and his co-authors show that although linking can result in low-quality sites free-riding on high-quality content, “in settings where there are evenly matched competitors, the option of placing links across sites may lead to equilibria where some or all sites are better off relative to a no-link setting.”
Links between peer content sites can increase profits by reducing competition, overproduction, and duplication. The intuition is that, instead of each site expending resources to produce what is essentially duplicate content, everyone can benefit if one site specializes in producing really good content and other sites link to it. Sites that invest in high-quality content benefit from additional referred traffic, while those publishing the links become trusted hubs that attract visitors without having to pay the cost of content production. Different sites might specialize in producing content on different topics, one on politics and another on sports, for example. Thus, all sites produce the type of content they are best at and link to the rest. In this scenario, consumers benefit all-round.
The authors point out that the above scenario can sustain the market entry of inefficient players, allowing them to free-ride on the success of other content sites by linking to them, potentially denting the revenues of target sites. Still, no content site would benefit from unilaterally blocking such links, because then free-riding sites would simply link to their competitors.
The Impact of Aggregators
Acknowledging that aggregators ‘steal’ traffic from content sites, the authors also point out that, “by making it easier for consumers to access good content, aggregators increase the attractiveness of the entire content ecosystem and, thus, also attract traffic away from alternative media.”
While aggregators may direct more traffic to high-quality sites, they also take away a slice of profits from content sites. This happens because some aggregator visitors check article headlines and snippets at the aggregator but never click through to the original articles. Furthermore, aggregators tend to increase competition between content sites. This may boost quality but reduce content producer profits.
See more about “Media, Aggregators and the Link Economy: Strategic Hyperlink Formation in Content Networks,” at Management Science.
Weiss shares inside story of Fenway Sports Group
Ed Weiss, General Counsel of the Boston Red Sox and Fenway Sports Group, visited the School of Management in Spring 2012 and told Dean Ken Freeman the inside story about the Sox owners’ purchase of a famous soccer team in Liverpool, their investment in a NASCAR team, and NESN. Their discussion is part of our new “Conversations with Ken” video series.
Teach For America Recruits at Boston University School of Management
The dual degree, MD/MBA is one exciting and growing element of the Health Sector Management Program. It is designed to prepare medical students to become physician leaders, innovators, and agents of change and development within the health sector. It equips them to go beyond direct clinical practice to also develop and lead systems of care and organizations of practice.
Dual degree students take a full year off from their medical training and spend it at the School of Management, gaining a comprehensive set of basic skills around business and management. They also take part in focused training in the health sector. The summer following their coursework (or at another time, depending on their medical school schedule), they participate in a 400-week internship. They then return to medical school and finish with two additional courses in the health sector.
Marcel Tam, MD/MBA candidate, on why the dual-degree is key to both his career plan and medical care at large:
Now in the MBA portion of the five-year MD/MBA dual-degree at Boston University, I am preparing to fulfill my responsibility as a future Family Medicine doctor. I’ve come to believe that to do this, my medical school training alone is not enough.
“My medical school training alone is not enough.”
It is incumbent upon me to learn the management skills necessary to practice primary care effectively and efficiently using what will likely be new business models. These models of health care delivery will require teamwork, performance improvement processes, and financial decision-making among other leadership and management skills.
My Value Proposition
Some view the field of Primary Health Care as a dying profession. Primary care physicians are working more hours with less patient contact, more paperwork, lower job satisfaction, and less pay versus their specialist peers. As the U.S. General Accounting Office has pointed out, by 2020, the projected number of primary care practitioners is expected to fall short of the increasing need.
For medical students with increasing loans and other external stressors, practicing primary care can appear to be the worst option for pursuing their dream of positively impacting the health of their patients. Indeed, Family Medicine (a primary care-focused specialty) isn’t even included in a much-circulated unofficial guide to selecting a specialty for medical students… a virtual non-option. Yet, while it may appear to be a waning field for physicians, Primary Care is in fact one of the most exciting opportunities to create high-impact, disruptive innovation in health care.
“The physician’s pen remains the most powerful lever for change in the industry.”
The reasons for this opportunity are clear. There is a pressing need (ex. a growing population with chronic disease) and there is money available to help meet this need (16% of national GDP is spent on health care). But why hasn’t there been more change in health care? The health care industry is fragmented and misaligned. Attempts to improve the system have been limited by systems and policies that promote conflicting incentives for multiple powerful players with complex relationships and with inadequate outcomes metrics. In order to be successful, new solutions need to satisfy this complex mish-mash of forces, and that is extremely challenging.
Despite these limitations, however, recent innovations show that disruptive change is possible. Retail clinics, like the MinuteClinic, are an example of a value-adding business process that improves outcomes while reducing cost. Qliance Medical Group, a direct primary care medical home spearheaded by physician Garrison Bliss, provides an expanded spectrum of affordable primary care services at a reduced cost while increasing the satisfaction of both patients and their care providers.
“I’m getting an MBA because I want to practice primary care the way it should be practiced.”
These innovations indicate that the patient-provider relationship is at the core of true systemic reform of health care. In fact, the physician’s pen remains the most powerful lever for change in the industry. Leaders like Dr. Bliss (Chief Medical Officer at Qliance Medical Group) and Dr. Andrew Sussman (President of MinuteClinic & an alumnus of the Boston University School of Management) show that physicians are still in an influential position to act as agents of change on behalf of patients.
That is why the knowledge, skills and behaviors that I am learning from my MBA coursework in organizational behavior, finance, strategy and more are essential components of my career development. Not because I want to be an administrator or because I want work in health care consulting. No. I am getting an MBA because I want to practice primary care the way it should be practiced: with the collaborative diligence and care necessary for maximizing health for individuals and for society. That is my value proposition.
Formerly with Deloitte Consulting, Strategy & Operation
Why did you choose BU School of Management?
BU was the only well-established, highly ranked program that offered a dual degree (MS·MBA) in two years.
My undergraduate degree was in MIS and finance, and I’ve seen first hand the value of the MS degree in consulting. It’s an invaluable skill when you can speak to the IT organization as well as the business side.
And the school happens to be in one of my favorite cities.
What’s been your biggest gain since coming to the School?
First and foremost, my classmates. I’ve met some incredible thinkers who can be counted on to offer challenging points of view, as well as simply being wonderful human beings. Studying with classmates like this really make this material come alive, because at least one person can always relate the material to real life.
How is Boston itself an advantage?
Nowhere else in the country are there so many educated, interesting people all living in the same city; there’s 50 colleges here. It also provides great networking opportunities between schools. For instance, we just held the BU Grad Society event which gets all the grad schools at BU together to discuss networking, professional development, and social events. We partnered with MIT’s similar organization this weekend for a great event with over 450 people attending.
Great time, and only possible in Boston.
When Life Hands You Cashews…
It’s funny how things work out. Leslie Shages (GSM ’11) started out as a freshman majoring in anthropology. She moved from there to one unlikely place after another, somehow managing to follow a natural progression regardless, and ended up as a world traveler and a Boston University School of Management MBA student.
Leslie’s long-standing interest in cultures and people led her to study abroad as a junior in college in a rather unusual place: Madagascar.
It was in Madagascar where Leslie had her first try at small business development. One of her host families was a doctor who ran a holistic clinic and became a mentor to her. When it was time for Leslie to leave, she wanted to show her thanks with a gift, but he wouldn’t accept. So instead, she decided to sell photographs she took in Madagascar back in the US and donate the proceeds to the doctor’s clinic.
“I went about it totally the wrong way,” says Leslie. “I didn’t keep books, and I priced the cards based on cost only and not value. But my local shops and community back home were very supportive, and I actually sold all 1,000 of the photo cards I had originally produced—and then some. I sent Nat Quansah $1,500 for his clinic.”
After graduation, Leslie found a perfect job with a women’s cooperative called Women in Progress that was looking for a photographer to take pictures of their program in Ghana. Leslie immediately jumped at the chance.
“I fell in love with West Africa,” she says. “Everyone in Ghana just had a lot of pride in the way they carried themselves, regardless of how poor they were. There was always a lot of dancing and singing, and if you went to church, everyone would be clapping their hands and was very joyous. It is a very vibrant culture.”
Leslie’s next step was to work as a program assistant at a Watertown-based international development organization. But her heart was still in Africa. So she joined the Peace Corps and was stationed in the West African country Burkina Faso for two years as a health care educator. She arrived in September of 2006.
In December, Leslie received a care package from her dad. He had sent a bag of honey sesame cashews from Trader Joe’s.
“My first thought was, ‘Darn it,” she says. Of all the things I miss from America, he sends the one thing that uses the three ingredients they actually have here.
“But then I thought: ‘business opportunity.’ I wonder if we could make these here?”
This is the question Leslie posed to the president of a small women’s group in the village where she was stationed. And with that, they got started on perfecting a recipe; three days later they had a great-tasting product.
Leslie and some of the other women from the group traveled to the nearest city to hand out samples of their new honey sesame cashews. Most folks were not used to the sweet taste, and the women got a lukewarm response.
Or so they thought.
A week later one of their biggest naysayers called to rush-order 50 pounds of the cashews for a wedding. The women’s group immediately went to work. Once completed, Leslie made the delivery and collected the payment. They had been paid $80, and everyone in the group earned around $4, the equivalent of working four 10-hour days on someone’s field.
“You couldn’t even compare the two incomes,” Leslie recalls. “I don’t think any of the members had ever gotten that big of a chunk of money at any one time before, and they hadn’t had to do back-breaking work to earn it. When I handed out the money to the women they began clapping and doing dances. I was just on cloud 9; I remember that as the best day of my life. It meant so much to them; it was the most important $80 I could have ever gotten.
“That’s when I thought, business is the way to go—the best way to do development work. People don’t get that excited when you tell them about having to get checkups and expensive medicines. But at least they couldn’t tell me they didn’t have the money to do those things anymore. I realized how much business opens up the ability for development in other areas. The women were so happy and empowered.”
Now Leslie is an MBA candidate in the School’s Public & Nonprofit Management program, hoping to continue her development work after graduation.
And the women’s group she helped to start the cashew business? It’s thriving. The women, some of whom had never left their village before they met Leslie, now make regular deliveries and transactions completely on their own, and have even added some new clients to their roster since she left.
Success on both sides of the Atlantic.
By Alissa Mariello
Why did you choose BU School of Management?
I couldn’t pass up the chance to get an MSIS and an MBA in the same two-year period.
I also really like being in a cohorted program. I wanted to be able to form lasting relationships with my classmates.
What’s been your greatest MBA take away?
As intense as it was, the Integrated Project really showed me how much every aspect of my education here would come into play in the real world: how managers have to consider financial, marketing, and strategic options in their decision making.
Why did you choose Boston University?
Because of the unique student body composition. The School’s special programs like the MS·MBA, Public & Nonprofit, and Health Sector Management attract a different type of student body than you would find at any other school. The mix of students creates an unmatched and highly varied environment, which really fosters stimulating discussions. The students are also more focused on learning through collaboration, rather than a cutthroat, “everyone-is-on-their-own” mentality.
What’s been your biggest gain since coming to the School?
The West Coast Networking Club focuses on helping students with an interest in career opportunities on the west coast, network with companies located in California. I participated in the annual Technology Trek, which allowed me to meet with hiring managers from companies like Apple, Adobe, CBS, Electronic-Arts, and Chevron. Ultimately, this led to securing my MBA summer internship at Chevron Headquarters.
Please comment on your MS·MBA experience.
The MS·MBA program has been great so far. It has allowed me to take a closer look at how technology enables companies to be more efficient. Now when I see a problem within an organization, I have many additional problem solving tools that I can use. MS·MBA students come from a wide range of backgrounds, and so prior technical experience is definitely not necessary to benefit from the program.
Senior Vikas Pisipati’s very first volunteer experience as a junior in high school was prompted by an interest in the medical field. So he raised some money himself, left his Wexford, Penn., home for the summer, and made his way to Guatemala City, where he worked as a volunteer at an orphanage for mentally and physically challenged children.
“There were about 25 kids at the orphanage,” Vik says, “and only three nuns to take care of all of them, so they relied heavily on volunteers for help. I hadn’t had much prior experience working with children at the time, especially those with such challenges. Many of them weren’t able to speak or walk. It felt really great to know that I had helped to make their lives a little happier.”
Thus, an interest in medicine evolved into a passion for volunteering.
When he got back to the states, Vik threw himself into fundraising for nonprofits. He started a club at his high school and constantly brainstormed new entrepreneurial ways to fundraise, just waiting for his next chance to go abroad and help in person.
He finally got it his sophomore year at the School of Management, where he majors in operations and technology management.
“I had read an article that said that the state of India where my family is originally from has the highest number of HIV and AIDS cases,” says Vik. “That really intrigued me, and I wanted to find out why.”
So he did what any 19-year-old would do. He connected with a group called the Center for World Solidarity and traveled to India to help educate the community about HIV. He visited several villages with a high number of HIV cases, teaching them about the risks. He also developed pamphlets on AIDS specifically targeted toward the high-risk demographic of 12-20-year-olds, a group that previously had little to no access to prevention information.
This sparked another idea. Vik thought that if he could write literature to educate people about HIV prevention, why couldn’t he do the same thing for a topic like accounting?
So when he returned from India, Vik started writing pamphlets about accounting with three friends and personally translating them into Spanish. The group had hoped to distribute them to poor regions in Latin American countries that could benefit from access to this type of information, and had even made connections with organizations that could distribute them. But unfortunately, it stopped there.
“It really became a question of resources and time,” says Vik. “We didn’t want to make promises to organizations that we couldn’t keep, because that would be worse than never offering our help in the first place. But all the materials are written, and hopefully someday I’ll be able to put them to good use.”
For the short-term, Vik is focused on a career in international business, ideally in supply chains. He hopes to travel more (he’s already been to 22 countries) and learn about new places and people.
“The exposure I’ve gotten to other cultures through volunteer work has really helped to prepare me for my future work in business. It’s helped me to understand how to deal with all types of people and has set me up to create better business relationships around the world. I hope to gain some practical experience, then eventually start my own nonprofit and really make an impact.”
Tess Waresmith (SMG ’10) has stood at the edge more times than she can count.
The edge of a diving board, that is.
Growing up in Dover, Mass., she started diving at the age of 11. With considerable talent and a lot of practice, by the age of 15, Tess had a promising future as a diver.
Things don’t always go as planned, though, and an ankle injury cut her diving career short.
After transferring in 2007 to Boston University School of Management from the University of Miami, she had all but given up on her dream. But with the encouragement of BU’s diving Head Coach Agnes Miller, Tess found herself once again on the edge of a diving board. In fact, by 2008, she was the captain of her team as well as the first Boston University diver in 20 years to make it to the women’s NCAA championship—and with a past injury no less.
“Injuring my ankle was really awful, but everything happens for a reason. “I came back to the Northeast, which isn’t known for its diving, but was happier, and more successful,” says Tess. “I was enjoying school a lot more and training just the right amount.”
Divers have to achieve a certain score during the regular season just to qualify for the NCAA’s zone meet, where they then compete to qualify for the NCAAs. Coming from the Northeast zone, Tess had to place in the top three to make it into the championship. Not only did she place in the top three, but she went on to finish 23 out of 42 in the NCAAs themselves.
“After my ankle injury, I had to reevaluate my goals. The Olympics weren’t going to happen, but it felt really good to make it to the NCAA championships,” she says.
Now, having exhausted her NCAA eligibility, Waresmith is leading the Boston University women’s diving team as the assistant coach. Her collegiate diving career may be over, but she hopes that the sport remains in her life in one form or another. As she moves forward with her business career, she knows that the lessons she learned will come in handy: One, the importance of precision. Two, the willingness to change and be flexible. Three, risk management. And four, plain determination and guts.
“A lot of times you’ve been doing something one way for so long that when someone tells you to do it differently, it can be scary. But you have to be willing to make the change and realize that at first it might not be as good. A lot of times when you make changes in diving, you take three steps back. But then, eventually, you take five steps forward. I think this is an important lesson in business too.”