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Is Bigger Always Better?

The human species is in a constant state of change. Therefore, the best companies are often those that are dynamic and change with the times. Some companies fade away, some grow larger, and some grow together.
It is this latter scenario that I find most intriguing. A failing company will sink, a successful company will swim. But why is it that companies merge? From an economic standpoint, it can be advantageous. Having a monopoly on an industry provides a joint company more flexibility in how it runs itself and where prices are set. And many of these merges go unnoticed. For example, Google now owns Youtube, but there have been little to no changes to the Youtube website since the merge. It was merely for economical and networking reasons.
Merging phone and cable companies is a great decision from a user’s point of view. Rather than having to deal with two different sets of data-distributing networks, they are combined into one, so everyone can benefit.
But one thing has concerned me about merging companies, particularly ones with expansive data networks. Is it always beneficial to have more users in your database? Take a look at Facebook’s friend recommendation system. Let’s say that there are 50 people who you would be friends with on Facebook, but are not currently friends with. These 50 people, feasibly, could end up as a friend recommendation. The fewer friends you have, the less potential people there are that could be recommended by the Strong Triadic Closure Property. Therefore, there is a higher chance of one of the people recommended to be within your set of 50. Conversely, if you are friends with a lot of people, then there are more people who you will be recommended to by the STCP and there is a lower chance of you finding one of those 50 people.
Obviously this over-simplifies many aspects of social networks and the STCP. But I still think it’s worth considering that the more data there is connecting people, the less distinct any given connection will be. And so, even if AOL and Yahoo plan to merge to save their slowly dying companies, it may only make things worse.

The human species is in a constant state of change. Therefore, the best companies are often those that are dynamic and change with the times. Some companies fade away, some grow larger, and some grow together.

It is this latter scenario that I find most intriguing. A failing company will sink, a successful company will swim. But why is it that companies merge? From an economic standpoint, it can be advantageous. Having a monopoly on an industry provides a joint company more flexibility in how it runs itself and where prices are set. And many of these merges go unnoticed. For example, Google now owns Youtube, but there have been little to no changes to the Youtube website since the merge. It was merely for economical and networking reasons.

Merging phone and cable companies is a great decision from a user’s point of view. Rather than having to deal with two different sets of data-distributing networks, they are combined into one, so everyone can benefit.

But one thing has concerned me about merging companies, particularly ones with expansive data networks. Is it always beneficial to have more users in your database? Take a look at Facebook’s friend recommendation system. Let’s say that there are 50 people who you would be friends with on Facebook, but are not currently friends with. These 50 people, feasibly, could end up as a friend recommendation. The fewer friends you have, the less potential people there are that could be recommended by the Strong Triadic Closure Property. Therefore, there is a higher chance of one of the people recommended to be within your set of 50. Conversely, if you are friends with a lot of people, then there are more people who you will be recommended to by the STCP and there is a lower chance of you finding one of those 50 people.

Obviously this over-simplifies many aspects of social networks and the STCP. But I still think it’s worth considering that the more data there is connecting people, the less distinct any given connection will be. And so, even if AOL and Yahoo plan to merge to save their slowly dying companies, it may only make things worse.

http://gizmodo.com/5838830/aol-and-yahoo-might-merge-into-one-giant-clusternut-of-awful

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