Partnering with IBM: their hardware, our content (1998)

Reading a competitor as a supplier of equipment

At the centre of this decision was the reinterpretation of an apparent competitor as the provider of the equipment the company lacked. The free-catalogue service could not exist without a physical network of installed terminals, and that network was precisely what Dip could never own. The fact that a rival aiming at the same ground had already finished installing would ordinarily be read as defeat. Tomita took it instead as a chance to use those points of contact without spending his own capital. By shifting the ground of competition from hardware to content, he can be seen to have moved the business into a field where a difference in capital would not decide the outcome.

That said, riding on another company’s installed network also means entrusting the premise of your business to whoever owns it. Dip would later take the same shape in its partnership with Yahoo!, where it met a different outcome — notice of termination. The model of earning through the substance of the information while owning no equipment carries, in exchange for its lightness, the property that the ground moves whenever the owner of the channel changes policy. This founding-era choice appears to have contained both sides from the start.