Virtual communities such as Facebook and MySpace have undoubtedly become a very important tool for companies that hope to capture a younger generation of consumers. To address this rising phenomenon, the undergraduate students in my marketing research class conducted a collaborative study to understand consumers’ participation in online communities and how companies can better utilize virtual communities in their marketing efforts. In this series of blogs, I will share with you the key findings from the study.

To start off, let me give you a little background on the study. The research project aimed to address four research questions:

• What is consumers’ extent of participation in online communities and what are the motivations behind such participation?
• What activities do consumers engage in at online communities?
• What makes one online community more popular than another (i.e., consumers’ community choice)?
• How effective is it for marketers to use online communities as a communication channel (i.e., advantages, barriers, problems, most effective tactics, etc.)?

To answer these questions, my students surveyed a total of 273 online community participants and 90 non-community participants using an online questionnaire. The age of the participants ranged from 14 to 59, with a median age of 22. There were slightly more females (56.7%) than males (43.3%). A majority of the respondents were college students, with 58.4% full-time students and another 13.5% part-time students. Most respondents also worked, including 36.1% working full-time and 41.9% working part-time. One caveat you should keep in mind is that this is a convenience sample that mostly consisted of the students’ friends, families, and acquaintances. Therefore, you should use caution when interpreting some of the results.

In the rest this series, I will share with you the key findings related to each of our four research questions. So keep tuned…

A little while ago, I wrote a two-part post on Microsoft’s irrational obsession with Google. Over the weekend, I watched a Science Channel program that detailed the background of Netscape and how it lost its battle against Microsoft. It was very interesting to observe the same kind of obsession and vengeance that Microsoft showed in that battle as it does today toward Google. That made me think: why was Microsoft able to defeat Netscape but not Google? Although Google does have plenty of Ph.D.’s as employees, it seems implausible that Microsoft simply doesn’t have employees smart enough to catch up.

There may be many reasons to explain this historical difference. For example, one may argue that Microsoft was distracted by its anti-trust case when Google was quietly gaining its strength. In my mind, however, one crucial reason was the fundamental difference between Google’s business model and that of Netscape.

As a traditional software business, Netscape relied on making money off its software. Therefore, when Microsoft offered its Internet Explorer for free, it immediately crushed Netscape’s fundamental business model. Google, on the other hand, offered its service to the average consumer for free and instead drew its revenue from businesses/advertisers. By doing so, it defeated the advantage Microsoft had: the deeper pocket. No longer can Microsoft use its free bundling and distribution power against Google. As its service is accessible over the Internet at no cost, Google was able to start on the same footing as Microsoft, and the deeper pocket Microsoft had could not help the company in this case.

The lesson learned from this is that, when businesses face a formidable rival, too often it’s easy to focus on what the competitor has that one does not have. But as Google’s luck shows, the best way to take down a larger rival is by rendering whatever advantages the larger rival has useless. Of course, this is built on the assumption that the company can still find sources of competitive advantage in an alternative area. What essentially happened in Google’s case was that they changed the rule of the game, and by doing so, it diminished Microsoft’s market power.

Reuters reported the launch of a 3D mouse called SpaceNavigator that can make navigation in Second Life easier and more intuitive. The designer of the mouse, 3DConnexions, is a subsidiary of Logitech and specializes in developing hardware that help users navigate 3D applications. SpaceNavigator represents an affordable version ($59) of their higher-end professional tools that sell for hundreds of dollars.

As a geek, I am always excited about new gadgets. I would be very interested in trying SpaceNavigator, and the entry price is low enough to take the plunge. However, I am not buying it yet for one reason: it is wired through a USB connection. Used to wireless mouse nowadays, having to use a wired mouse feels like a step back in time. Although not an expert on the technical issues, I imagine the reason the mouse is wired is because of energy consumption and the higher complexity and amount of movement data that need to be captured and transmitted. But I am certain these technical issues will be solved at some point soon. So I am going to wait for the wireless version of SpaceNavigator before I hand over my money.