Daniell Pritchett’s blog, sharing at work, talks about seven great communities for sharing ideas for collaboration in the workplace. He says that the Wikinomics Blog is his first stop! Thanks for all your great comments on the blog, Daniel!

Singapore Entrepreneurs talk about how Wikinomics principles are being applied in the new Singapore-based business Gogme.biz. Gogme plans to harness the minds, resources and pockets of individuals world-wide to kick-off three new businesses. They will whittle down an initial pool of 50 business plans down to 3 via votes from its membership. The final three plans will then be implemented.

Jon Mott talks about the Wikinomics of education. He talks about Web 2.0 technology in education and that it has yet to be fully utilized and that educators need to do a better job of making education more modular.

Louis Columbus talks about how Twitter can be used to enhance customer relationships on the Perfect Customer Experience blog.

JMadigan.net is reading and reviewing 52 books in 52 weeks. #36 on the list was Wikinomics. Interesting idea. The review isn’t entirely positive, but still recommends the book as a good read. He even mentions how he witnessed the power of collaboration while working at Gamespy.com (a service I used in the early days of online gaming).

Come back next week for more links across the blogosphere.

He describes how the software as a service (SaaS) model and on-demand computing is not a gold mine for software vendors.

Anyone who thinks the software-as-a-service business is a gold mine for vendors is wrong. The economics are fundamentally different from those of the traditional software business – and not in a good way. As Lacy writes, the Web is “just as good at displacing revenue as it is in generating sources of it. Just ask the music industry or, ahem, print media. Think Robin Hood, taking riches from the elite and distributing them to everyone else, including the customers who get to keep more of their money and the upstarts that can more easily build competing alternatives.” Web apps remain a hard sell when it comes to big, conservative enterprises, and the capital and marketing costs are daunting, particularly if you’re running your own data centers. This revolution in business software will play out slowly and, for most suppliers, painfully.

Carr is right; the economics are fundamentally different from those of the traditional software business. However, they are different in a good way. Just like how utility companies changed the electric power game by drastically reducing costs, cloud computing and SaaS vendors will change the software and server game. Carr even made this same argument in his book, The Big Switch. “What the fiber-optic Internet does for computing is exactly what the alternating-current network did for electricity.”

The problem SaaS firms are having is that they are relying too much on the technology and the medium of distribution, and not on the service. Salesforce.com has been successful and the “poster boy” of SaaS because it provided a better CRM system than what was already available.

Steve Papermaster, the CEO of nGenera said at a recent SaaS panel discussion that SaaS vendors must provide new functionalities in order to succeed: “[SaaS] changes your billing cycle, but doesn’t change the game for the customer…If you’re not providing disruptive change in the positive sense for customers so they can run and lead their business very differently from before, then you’re not providing breakout value.” As soon as more vendors realize this, on-demand computing WILL become a gold mine for SaaS vendors. If the end product to the enterprise is ultimately more valuable, SaaS vendors don’t necessarily have to charge significantly less than the offerings of current vendors.

Most SaaS vendors are targeting small and medium sized businesses (SMBs) where the margins are much smaller. For SMB’s, SaaS makes more sense as they are unable to pay the high fees of traditional vendors. This current practice results in what Lacy described as Robin Hood taking money from the rich and distributing it to the poor. However, Papermaster continues, “the issue is not so much one of ‘is SaaS going to be acceptable to the enterprise,’ it’s rather how will it be possible for an enterprise not to run globally on demand?” Both large, traditional companies and SMBs alike will be forced to make the switch, as the level of service will be so much greater than what the traditional vendors are offering. For larger companies, vendors can include value-added service and consulting work on top of the basic platform to justify charging a higher subscription fee.

Current economic arguments aside, the companies soon to be staffed by the Net Generation won’t just appreciate always on SaaS applications, they’ll expect them. This hyper-connected, tech-savvy generation will not tolerate upgrade cycles, instead expecting the daily improvements and tweaks only SaaS vendors can provide.

Although both Carr and Lacy recognize that cloud computing and SaaS is the future, the future is a lot closer than they think.

Note: BusinessWeek has published special report on cloud computing.

The demand for more server capacity will continue to grow exponentially as both the number of web users grow, and the data becomes more complex. Although energy costs are still relatively small, they have the potential to spiral out of control. Am I the only one who sees the Great Canadian North as the possible future server farm capital of the world? There is endless, cheap, land, plenty of wind for power, and it’s naturally very cold. However, Siberia may give it a great run for its money.

Do people see this as a problem in the future, or will more efficient alternatives replace the concept of the server farm for our ever-increasing data needs?

This week I will profile the Seattle based coffeehouse giant Starbucks. In case you missed my last report card on De Beers; you can find it here. You can now find all my previous entries, and posts relating to them on the new Regular Features tab on the top left side of the page. Like all my previous entries, I will be evaluating Starbucks on the Wikinomics principles of being open, peering, sharing, and acting globally.

Company Background: The original Starbucks was opened in Pike Place Market in Seattle, Washington, in 1971 by three partners. They sold coffee beans and high end coffee equipment, but didn’t sell any actual coffee. Entrepreneur Howard Schultz (current President and CEO) joined the company in 1983, and after trip to Milan, Italy, suggested that they sell coffee and espresso drinks in addition to beans. The original owners disagreed with this new direction, and sold the company to Schultz in 1987. By the time the company went public in 1992, it had grown to over 165 locations across North America. In 1996, Starbucks opened its first international location when it opened in Tokyo, and opened in London in 1998. Today, Starbucks has over 16,000 stores in 44 countries including over 11,000 in the U.S. alone. However, the company recently announced that it was closing down 600 underperforming company-owned stores in the U.S., effectively ending the era of prolific growth and expansion.

Being Open: Starbucks ranked 7^th on the Fortune 100 list of Best Companies to Work For 2008. Although friends of mine may tell you differently, Starbucks treats its employees very well. They offer health, dental, eye-care benefits to all employees who work an average of 20 hours per week over a three month period in addition to a 30% discount on drinks and merchandise. While Starbucks treats its employees well, it has been the target of much public controversy. While Starbucks claims that all their beans are purchased through fair trade, groups such as organicconsumers.org say that only 6% of Starbucks coffee is certified free trade. While they say the amount Starbucks ultimately pays for its beans is fairly comparable to free trade prices, Starbucks does its transactions through middlemen rather than with the farmers directly. Starbucks claims to sell “rare, exotic, cherished” beans from a remote plantation in Ethiopia that Starbucks advertising says is grown in ways good for the environment – and for local people too. However, this eco and poverty friendly sales pitch falls flat when the farmers are paid $1 a day and the plantation is located in a threatened mountain rainforest. Instead of committing to an accountable and respected third-party certifying system, Starbucks has created in internal “corporate responsibility” model that is expensive for coffee farmers, non-transparent and strictly voluntary.

Grade: B-

Peering: My colleague David Cameron wrote about My Starbucks Idea on the blog a few months ago. The idea is quite similar to Dell’s Ideastorm, most recently blogged about by Justin Papermaster here. The basic idea is that Starbucks customers submit ideas, and then discuss and vote on them. Starbucks then tries to implement the best ideas, and you can now follow their implementation progress on Twitter. This is a great idea that both generates great feedback and does a great job at engaging customers.

Grade A

Sharing: Starbucks does its best to try and control its intellectual property. Starbucks owns most of its stores, and only franchises or enters into joint ventures in certain circumstances. From the Starbucks website, “A qualified high volume/high traffic retail or foodservice operation can own and operate a Starbucks licensed store.” However, Starbucks will only license its name and operations in places like airports, college campuses, or hospitals where they would otherwise have no access. While it violates some Wikinomics principles, it is hard to criticize Starbucks for going this path. Even without franchising, and sharing its intellectual property, Starbucks has completely saturated the U.S. market. However, Starbucks is smartly entering foreign markets through joint ventures, partnerships, and licensing agreements.

Grade: B+

Acting Globally: Starbucks is profitably expanding internationally. With increasing news about store closures in the United States, Starbucks’ international expansion is more important than ever. So far, it has been very successful in penetrating markets traditionally opposed to American coffee, or coffee in general. While Starbucks is having a hard time convincing the older generations in France to abandon cafes, younger generations are joining American tourists in embracing frappuccinos and caramel flavored coffee. Starbucks is also expanding aggressively in tea-drinking nation of China. Starbucks is trying to overcome this by empowering China’s emerging middle class to show off their new lifestyle, and purchasing Western luxuries like Starbucks coffee. While Starbucks’ international expansion has gone well thus far, it still faces public protest for what it represents in a similar way to McDonald’s. Starbucks has been boycotted by antiwar protesters in Lebanon and criticized by New Zealand advocates seeking higher coffee prices for farmers. Faced with the possibility of terrorist attacks, they pulled out of Israel. However, these are minor bumps that are expected with international success.

Grade: A-

Overall Verdict: Despite its recent ailings due to a suffering American economy, Starbucks is an international success story. In the 20+ years since being sold to Howard Schultz, the company has had unprecedented growth. It is harnessing the power of Wikinomics through its use of peering with My Starbucks Idea, and is taking steps to becoming a bigger advocate of free trade and organic coffee.

Overall Grade: A-

I am not a coffee drinker or a frequent Starbucks customer, but I applaud what they have done as a company. I was wondering what fans of Starbucks had to say. Have you submitted anything on My Starbucks Idea? Do you think they should be more of a leader in the free trade movement? Do you drink Starbucks coffee when you go on vacation in Europe?

Any and all comments are welcome!

The site was home to a coal power plant until 2005, and was to be replaced by a gas-fired generator before the community led Lakeview Ratepayers Association stepped in. The 800 member group came up with a plan that called for a 200 hectare mixed use community with medium-rise buildings, residential, employment and educational sites, and a “destination” waterfront area devoted to trails, parks, an aquarium or stadium, and a pier with entertainment and educational features.

This amazing feat brings the “not in my backyard” (NIMBY) opposition to a new level. Will Dick wrote about direct democracy last week. In a world like that, how is the NIMBY problem solved? NIMBY relegates power plants, airports, and other high polluters farther and farther away from population centers where they are more useful. Even though high voltage AC transmission lines try to minimize energy loss when transporting electricity, they still lose about 20% per 1000 km.

Is this a loss we can deal with when giving citizens more power in planning their respective communities?

P.S. Sorry Wikinomics Report Card fans, I don’t have another entry this week, but if you missed my last entry on De Beers, you can find it here. The Report Card will return next week, better than ever!

This week I will profile the South African based diamond company De Beers. I case you missed my last report card on Blizzard Entertainment; you can find it here. I would like to thank Will Runyon for suggesting this week’s topic and directing me to this excellent Wall Street Journal article. Like my previous entries, I will be evaluating De Beers on the Wikinomics principles of being open, peering, sharing, and acting globally.

Company Background: De Beers has been the most dominant player in the diamond industry for the last 120 years. In the 1930’s Chairman of the De Beers Group Sir Earnest Oppenheimer came up with the idea of single channel marketing. He defined it as:

“a producers’ co-operative including the major outside, or non-De Beers producers in accordance with the belief that only by limiting the quantity of diamonds put on the market, in accordance with the demand, and by selling through one channel, can the stability of the diamond trade be maintained.”

This basically made the diamond industry a cartel in which De Beers controlled 60 – 80% of the world’s supply. They carefully controlled the supply, and effectively controlled the diamond’s rarity. In 1947, De Beers targeting the emotional value of diamonds by launching the campaign “A Diamond is Forever” which Advertising Age magazine named the best advertising slogan of the 20^th century. This changed the industry forever as it effectively prevented a secondary market as a diamond was meant to be untouched by any other woman.

Today, De Beers is a company in transition. When CEO Gareth Penny took over in 2006, the company was in the process of completely changing its business model from controlling industry supply to a more demand driven model. Today, it only controls around 40% of diamonds traded worldwide. In addition, movies like Blood Diamond triggered waves of negative publicity about the conflict diamond trade in the 1990’s.

Being Open: Traditionally, De Beers has been very closed in their dealings. Throughout their history, they have tried their best to control industry supply, and keep competition down. In 1994, along with GE, they were charged with price fixing on industrial diamonds. In 2006, De Beers settled numerous class action lawsuits alleging that they were keeping the price of diamonds artificially high and violating anti-trust laws. They agreed to pay out almost $300 million to anyone who bought diamonds from a jewelry store from 1994 – 2006. However, ever since Gareth Penny became CEO and the complete change in business strategy, the company has become more open and transparent. Now, 100% of their diamonds are sold through the Kimberly Process which ensures that diamonds are conflict free. For the second consecutive year, they released a massive “Report to Society”. The Report covers De Beers approach, economics, ethics, employees, communities, environment, and a range of case studies, initiatives and related web sites. However, it was reviewed by Ethical Corporation magazine as “transparent but not entirely reader friendly. You can find the 2007 report here.

Grade: C+

Peering: A peer production model is not generally used in the mining industry. Exploration and extraction data is usually kept very private. However, De Beers should take a page out of the Goldcorp play book. In 2000, Goldcorp was struggling and unable to get the production they wanted out of one of their mining sites. That same year, they launched the Goldcorp challenge where they released over 50 years of geological data (everything they had) to the world offering $575,000 in total prize money to those who found deposits. The challenge was a resounding success, and led to the discovery of an additional 8 million ounces of gold. Since De Beers hasn’t found a new site in over 10 years, they may need to look for more innovative solutions to find more diamonds. Granted, there are significant differences between Red Lake Ontario where Goldcorp’s mine was and Botswana or Namibia. Although not nearly on the same scale, De Beers did co-sponsor Geological Odyssey 2001, a platinum challenge, with Goldcorp and offered a $4000 diamond as a prize.

Grade: D

Sharing: As mentioned above, De Beers is not really sharing much of its intellectual property, but it is doing a good job sharing with Africa, and the communities it operates in. De Beers has a 50-50 partnership with both the government of Namibia and Botswana. The government of Botswana owns 15% of the company and the diamond industry contributes over 33% of the country’s GDP. This allows the country to provide free education to everyone up to the age of 13. While De Beers has been criticized in the past for not hiring enough black employees in South Africa, it has undergone a recent black-empowerment deal so that now 26% of the South African country is in the hands of a black investment vehicle. De Beers is constantly looking for investments into emerging local businesses, and with its partners, invests close to $4.6 billion into African economies. De Beers seems to be shifting its marketing campaign to include African wellbeing. In the WSJ interview, CEO Gareth Penny said:

“We want people to know that with any diamond they buy, that product is not only deeply meaningful to them but, in terms of the contribution that it is making, to Africa”

This shows that their profit sharing with Africa may lead to positive publicity, and ultimately allow them to charge a larger premium.

Grade: B –

Acting Globally: De Beers does most of its mining in Africa, but also owns a few sites in Canada as well. They have failed to capitalize on newer sources of diamonds like Russia, India, Brazil and Australia. Demand is outgrowing supply at an increasing rate, so new sources will need to be found in order to keep up with this rising demand. Emerging market powers like India and China have driven up the demand for diamonds globally. This will lead to rising prices, which may strain its established North American market as it struggles economically. Currently, the U.S. represents 50% of its market share, and countries tied to the dollar represent almost 2/3s of their market. If the U.S. dollar continues to decline, De Beers may be forced to sell diamonds in a different currency to a more international market. It will need to search in alternative markets to find the highest bidders for its diamonds. According to the WSJ, they have no plans to change their American-focused strategy. De Beers should try to replicate its past success in Japan. There was no tradition for romance, courtship, seduction and prenuptial love in Japan; and no tradition that required the gift of a diamond engagement ring. If De Beers was able to penetrate Japanese society, they should be able to shift away from the American market as easily.

Grade: C

Overall Verdict: De Beers is still doing very well financially. Their masterful control of the diamond market over the last 120 years has led to a very strong position. They are starting to make strides in becoming a next generation enterprise. By continuing to apply Wikinomics principles, they should be able to remain #1 in the industry. With the current market conditions, a new diamond discovery would prove extremely profitable for the company. Its current methods aren’t working, so it will need to tear down its walls, and continue to open up to the world’s knowledge.

Overall Grade: C

Knowing how masterfully De Beers has created demand for diamonds, will you still spend/expect two months salary for a diamond engagement ring? Did De Beers do such a good job creating demand for its product that it doesn’t need Wikinomics? Is De Beers still exploiting Africa?

Thanks again to Will Runyon for suggesting this topic. If you have your own idea for a Wikinomics Report Card, message me on facebook, or e-mail me at bletalik@ngenera.com

• Andrew Jones of the Tall Skinny Kiwi talks about how the Wikinomics ideas of transparency, generosity, and trust relates to the Bible and Christian ideals.
• As mentioned in the comments of last week, a relatively new website, Swirrl, has posted a review of Wikinomics.“Swirrl is like a wiki, but better.”
• The State Sunshine and Open Records blog criticizes “Show us a Better Way”, a new website sponsored by the British Government, but reconsiders the statement after hearing this site is the brainchild of the U.K.’s Minister for the Cabinet Office. The website invites users/citizens to post ideas for new government services.
• Wikinomics and how mass collaboration will fundamentally change learning was one of the topics at the recent NECC 2008 conference.
• Brendan Dunphy’s Innovation Blog debates the Wikinomics Report Card on General Motors. He argues that closed innovation is better when the current market solution is not sufficient.
• Paula Thornton of the Fast Forward Blog talks about Don Tapscott’s economic tsunami in reference to the User Revolution and the Age of Aquarius.

This week’s edition of the Wikinomics Report Card will profile Blizzard Entertainment, the creators of World of Warcraft and one of the world’s most profitable gaming companies. In case you missed my last report card about General Motors, you can find it here. Like my previous entries, I will be evaluating Blizzard on the Wikinomics principles of being open, peering, sharing, and acting globally.

Company Background: Blizzard Entertainment was founded as Silicon and Synapse in 1991 by three UCLA students and after a number of name changes, settled on the name Blizzard Entertainment in 1994. That same year, Blizzard broke though when they released Warcraft: Orcs & Humans and solidified Warcraft as its flagship franchise the following year with the release of Warcraft II: Tides of Darkness. In early 1997, they revolutionized the industry by offering a free online gaming service, Battle.net, to go along with their new game Diablo. Blizzard built on its online success by releasing Starcraft in 1998 which has sold over 9.5 million copies to date. In addition to its success in North America, Starcraft built a huge fan base in Asia, specifically in South Korea. Starcraft became a pop-culture phenomenon in Korea. Professional games are broadcast on television and some games are played in stadiums with thousands of screaming fans. Blizzard released more and more successful titles over the years, and built up one of the largest and most loyal fan bases in the industry. As an example, I have purchased every Blizzard game since Warcraft II. Blizzard cashed in on this success in late 2004 by releasing its first massively multiplayer online game, World of Warcraft (WoW). As of January 2008, WoW has more than 10 million subscribers worldwide paying on average $15 per month.

Blizzard has been making headlines recently since it announced that it was merging with Activision, publisher of the popular Guitar Hero series. This merged company, Activision Blizzard, will be the most profitable pure-play company in the industry. The merger will approved pending a shareholder vote on July 8.

Being Open: Blizzard is a very open company in many ways. They offer fans guided tours of their headquarters, and even host an annual convention, Blizzcon for their fans. Lead designers of games often post in their official forums, and are very involved with the community in general. They take fan feedback very seriously, and often implement changes based on community recommendations. However, all Blizzard fans know that they are very closed regarding the release dates of their games. Whenever they are asked when a game is to be released, the response is “when it’s done”. This strategy is partly responsible for the consistent high quality for their games. Unlike most game companies, Blizzard is not given hard deadlines by their publisher, so fans are guaranteed a great deal of polish with each game.

Grade: A-

Peering: Blizzard has learned to harness their powerful community with peering. Since Warcraft II, they have released free “world editors” with their games. This gives users the ability to create their own content and has resulted in extending the replay value of their games. One of the most popular user-made modifications is “Defense of the Ancients” (DOTA) for Warcraft III. It has been called “…the most popular and most-discussed free, non-supported game mod in the world”. It could be argued that DOTA is more popular than Warcraft III.

Blizzard has also utilized peer production in World of Warcraft. Blizzard released a free API with the game that allows users to personally customize the interface of the game. These customized interfaces are so good that players are actually at a disadvantage not using them. With their next expansion pack, Wrath of the Lich King, Blizzard is planning on implementing the best aspects of the user created interfaces into their own.

Grade: A+

Sharing: Blizzard has always been very open to sharing their content. As described in the previous section, they release a large portion of their game to the public via world editors. In addition to that, Blizzard shares its games in its testing phase via open and closed betas. By sharing this content, Blizzard allows its fans to debug and balance the game for them. The best thing is that fans line up to do this as it gives them a sneak peak of the latest game. However, Blizzard usually tries to limit the number of testers to control the flow of feedback. The lucky testers must sign a non-disclosure agreement that prevents them from sharing any information about the game.

This, however, acts as an open invitation to hackers to try and leak the data as much as possible. This is where Blizzard is a little closed. After leaks occur, Blizzard tries its best to try and stop the leak through banning users, and even sometimes sending in its lawyers to shut sites down. I am unsure if this is the best strategy. I can see why Blizzard doesn’t want any mis-information spread, but I fail to see the harm in building buzz through the game by allowing the semi-public information to flow freely.

Grade: B+

Acting Globally: Blizzard is the leading Western entertainment franchise in Asia. As the graph below shows, the majority of its WoW subscribers come from Asia and it is growing at a much faster rate. Blizzard tries to release most of its game simultaneously worldwide and it has resulted in strong fan bases around the world. Although its North American and European markets are strong, Blizzard sees Korea as one of its primary markets for Starcraft II. It is possible that WoW’s success in China will translate to more sales of Starcraft II there as well.

Grade: A

Overall Verdict: Blizzard is a great company that should only get stronger as its international fan base grows and they release sequels to its popular franchises. When they announced Diablo 3 at the Blizzard Worldwide Invitational last week, it took the Internet by storm. If Blizzard is able to leverage Activision’s console expertise and presence after the merger, they should be able to substantially grow their market and fan base. Personally, I can’t wait for the first Activision-Blizzard game. The great thing about Blizzard, is that they have always used Wikinomics principles when developing their games. What do other Blizzard fans think? Are they going in the right direction? Do you have any other Blizzard examples to share?

Overall Grade: A

This week’s edition of the Wikinomics Report Card will focus on General Motors Corporation (GM). In case you missed my first report card about Major League Baseball, you can find it here. Like last week, I will be evaluating GM on the Wikinomics principles of being open, peering, sharing, and acting globally.

Company Background: GM was founded in 1908 and is the world’s largest automaker and leader in global sales for the last 77 calendar years. It manufactures cars and trucks in 35 different countries under the brands Chevrolet, Buick, Cadillac, Pontiac, and many more. Under the strength of Alfred Sloan’s revolutionary corporate structure and leadership, GM was once one of the world’s most profitable companies peaking in the early 80’s with a U.S. market share of 45%. However, the legacy costs and complex accounting systems associated with the Sloan era have hindered GM’s efforts to create a more lean manufacturing process. Stiff foreign competition from companies like Toyota and poor strategic decisions like focusing on SUVs and light trucks in a rising fuel market has led GM to one of its weakest points in its history. Yesterday, its stock reached a 53-year low after Goldman Sachs changed it status to “sell”. GM is hoping that it can weather this storm long enough to introduce its new line of alternative energy vehicles like the Chevy Volt and reclaim some of its former glory.

Being Open: Traditionally, GM has been a very closed organization. Even internally, its different brands acted with a silo mentality. In the Alfred Sloan era, GM used espionage tactics to quell union uprisings and in the mid 20^th century, GM was blamed for killing American public transportation in the Great American Streetcar Scandal. In the 1990’s GM was accused of killing the electric car so that it could sell its high margin SUVs and trucks. GM had a fully functional electric car with the EV1, but scrapped the program entirely in 2003. Despite an offer of $1.9 million for the 78 EV1s already produced and a waiting list of customers, GM stripped the car of its recyclables and crushed them. However, in recent years, GM has made great strides in opening up. GM’s chairman and CEO Rich Wagoner admitted that the worst decision of his tenure was “axing the EV1 electric-car program and not putting the right resources into hybrids. It didn’t affect profitability, but it did affect image”. GM’s R&D chief Larry Burns said that “if we could turn back the hands of time, we could have had the Chevy Volt 10 years earlier.” Admitting this mistake is a big step in being open and acting with integrity in the new era. GM has started by being very public and transparent about its production plans for the Chevy Volt. Also, GM is one of the few car companies to have higher executives and “Car Czar” Bob Lutz blog on a regular basis. GM continues to act more openly, it should be able to repair its damaged reputation.

Grade: D+

Peering: Although peer production of automobiles is very difficult with today’s technology, GM has been able to leverage peering very well in its marketing efforts. From our paper on the 8 Net Gen Norms:

Net Geners are also helping develop advertising campaigns. GM invited consumers to a newly built Web site that offered video clips and simple editing tools they could use to create ads for the Chevy Tahoe SUV. The site gained online fame after environmentalists hijacked the site’s tools to build and post ads on the site condemning the Tahoe as an eco-unfriendly gas-guzzler. GM didn’t take ads down, which caused even more online buzz. Some pundits said GM was being foolhardy, but the numbers proved otherwise. The Web site quickly attracted more than 620,000 visitors, two-thirds of whom went on to visit Chevy.com. For three weeks running, the new site funneled more people to the Chevy site than either Google or Yahoo. Most importantly, sales of the Tahoe soared.

This hugely successful campaign generated a lot of buzz for GM at a very minimal cost. With GM’s negative operating margins, cutting down advertising expenses through peering could greatly reduce costs and improve the bottom line.

Grade: B+

Sharing: GM has done a great job involving itself in joint ventures and collaborative efforts over the last few years. GM is the majority stakeholder in the Korean automaker Daewoo, and has collaborated with many of the world’s auto manufacturers. This includes product, powertrain and purchasing collaborations with Suzuki Motor Corp. and Isuzu Motors Ltd. of Japan, advanced technology collaborations with Toyota Corporation and BMW AG of Germany and vehicle manufacturing ventures with several of the world’s automakers including Toyota, Suzuki, Shanghai Automotive Industry Corp. of China, AvtoVAZ of Russia, Renault SA of France, and most recently, UzAvtosanoa of Uzbekistan.

More importantly, GM has decided to outsource its battery development for its future cars like the Chevy Volt whereas Toyota has decided to develop their battery technology internally. Toyota’s closed attitude and lack of collaboration could eventually lead to a technology gap between itself and GM. While Toyota has profited from selling its superior hybrid software and technology, they may lose out to GM in the future if they remain on this path.

Grade: A-

Acting Globally: GM’s ceo Rich Wagoner expects that 75% of its car sales will be outside the U.S. within a decade. GM is the largest overseas automaker in China and is GM’s second largest market after the United States. After growing sales by 27% each year for 5 years, the GM’s China sales grew 19% last year. This success is largely due to the success of their joint venture between them and Shanghai Automotive. GM is building a new research centre in Shanghai focused on hybrid technology. This is GM’s first venture that is completely separate from Shanghai Automotive. The announcement coincided with the Chinese Government’s powerful National Development and Reform Commission disclosing that it would provide subsidies to alternative fuel vehicles under certain conditions. One major condition was that critical parts must be manufactured in China. While Toyota assembles its cars in China, the critical parts are manufactured and shipped from Japan. This should give GM a big head start in selling hybrid vehicles in China. If GM can repeat its success in China in other emerging markets, it may be able to keep up with Toyota’s sales in the future.

Grade: A-

Overall Verdict: GM is in a very deep hole right now. They are losing around $2 billion a month, and even the new initiatives outlined above won’t act as a quick fix. However, they are building quality cars once again, and seem to be making a lot of great moves. Since the stock is at a 53 year low, this (more like a year from now) may not be a bad time to invest in some GM stock. If the Chevy Volt goes into production on schedule in 2010, high gas prices should propel its sales, and more importantly GM’s corporate image. If 10 years from now, 75% of GM’s sales come from outside the U.S., and its legacy cost issues are solved, they could reclaim the crown from Toyota.

Overall Grade: B

What are your thoughts? Could you see yourself driving the Chevy Volt (above) in 2010?

Hello Wikinomics blog readers! I’m a new summer student with the Wikinomics team. I have decided to do things a little differently and profile a different business each week and grade them through the Wikinomics Report Card™. I will try to focus mainly on older businesses and organizations and analyze how they are utilizing the wikinomics principles such as being open, peering, sharing, and acting globally.

Background: Major League Baseball (MLB) was originally founded in 1876 and the current structure of the American League and National League has existed since 1903. Baseball is a game ingrained in American culture, and is frequently referred to as America’s pastime. Although attendance has grown steadily since the league’s inception (ignoring strikes and lockouts), the game is slowly fading away from the public consciousness.

Being Open: Major League Baseball is far from open. Its 30 team league remains fixed and closed, and the league is lagging behind the other major North American sports in video reviewing plays. There have already been multiple incidents of home-runs not being counted because of a lack of a video review system. Even worse are allegations that the league has long known about players using steroids and other performance enhancing drugs yet failed to disclose the information to the public. The resultant investigations of high profile players such as Roger Clemens and Barry Bonds has left a dampener on their career achievements.

Grade: D

Peering: This is where MLB has shined in recent years. Baseball has always been a game of statistics, and the release of pitch f/x has opened up countless opportunities for great visualization tools for baseball enthusiasts and bloggers alike. Pitch f/x provides fans with the release point, speed, location and movement of every single pitch thrown. The Mockingbird, a Toronto Blue Jays focused blog, has done a great analysis of the hitter Alex Rios using a pitch f/x visualization tool.

He found that Rios was hitting outside pitches much worse than normal and hypothesized that this was due to a change in his batting stance. For those who want to learn more about MLB’s vibrant statistical community, I recommend The Hardball Times and The Baseball Prospectus.

Grade: A

Sharing: MLB is trying very hard to protect their intellectual property. While they do provide a nice widget called gameday for free on their official site, users must pay to get access to watch their games via mlb.tv. While I can see how this makes sense in local markets where people have access to seeing the games live, this is not an option for people in rural communities or more importantly around the world. Internet users responded by watching games on SopCast a peer-to-peer streaming video website. However, like many old businesses, MLB sent in their lawyers and is one of the few major sports not available for viewing on sopcast. Now, these fans are forced to watch games with more obscure technology such as TvAnts if they can navigate the Japanese channels that broadcast the games.

Grade: B-

Acting Globally: MLB is making great strides in increasing their global appeal. For the second time this year, MLB started the season off in Japan where the defending champions Boston Red Sox took on the Oakland Athletics in a two game series. MLB has also been increasing their global appeal by forming the World Baseball Classic. Similar to the World Cup of Soccer, the best baseball nations around the globe compete to see who is number one. Finally, MLB is becoming a more international league. More players than ever are foreign born, and the trend is increasing every year. Importing the best players from Japan has greatly increased the popularity of the sport in the country as Japanese reporters follow the best players such as Ichiro Suzuki all season long. Where MLB is lacking is the fact that 29 of its 30 team league are based in the United States. Toronto is the only international team in the league.

Grade: B+

Overall Verdict: MLB has come a long way in embracing the principles of wikinomics in the last few years. They have shown great promise with new technologies such as pitch f/x and events like the World Baseball Classic. They need to try and be more open to changes in the game by allowing video review, and maintain its integrity by fully disclosing any issues of cheating. In addition, I think they need to expand their league more internationally by adding teams in Mexico and other Latin American countries. If they improve in these areas, maybe one day baseball will be referred to as the WORLD’s pastime.

Overall Grade: B-

Baseball fans, what say you? I would greatly appreciate some feedback on this article as well as suggestions on future businesses to profile. No business is too old or too obscure for the Wikinomics Report Card!