With Whom Do Technology Sponsors Partner During Technology Battles? Social Networking Strategies for Unproven (and Proven) Technologies

Abstract

The academic literature on technology battles has grown rapidly since the 1970s, tracking the ever-expanding role of information and communication technologies in our daily lives. An intriguing thread in this literature pertains to the influence of social networks on standards setting processes. While scholars acknowledge networks’ importance, their relevance to sponsors’ efforts to diffuse their technologies and establish them as de facto standards have been neglected. We theorize that sponsors choose alliance partners according to their location in the networks that connect potential adopters and that the network position that enhances a partner’s attractiveness depends on a technology’s stage of development. We hypothesize that sponsors of technologies that are early in their development and unproven commercially choose partners to create multiple points of contact between previous and potential adopters, called wide bridges. These redundant ties can foster the broad acceptance of a new technology that is essential to drive its diffusion. Sponsors of technologies in later stages of their development, with a commercial track record, can rely on a sparser network of ties to activate peer-to-peer diffusion. In line with our predictions, we found that during the battle to establish a 2G wireless standard in the U.S. market, Qualcomm, sponsor of the unproven CDMA (code division multiple access) technology, formed alliances that conformed to a wide-bridge pattern, while Ericsson, sponsor of the proven TDMA (time division multiple access) technology, formed alliances consistent with a peer-to-peer pattern of diffusion.