ABSTRACT

How can firms make use of online communities as part of an innovation strategy aimed at

leveraging resources and ideas outside the four walls of the enterprise? Online communities

are today a widespread phenomenon that takes a variety of forms. Free and open source

software is probably the most well-known case, where geographically dispersed individuals

collectively develop new software and produce innovation. In 1991 Linus Torvalds founded

the Linux kernel, the heart of an operating system with the ability to have a real impact on

Microsoft’s market share. Torvalds’ initial ideas led to the building of a community that

collectively developed the Linux kernel. From the original incorporation of some 10,000 lines

of source code, by 2005 the community had developed more than 6,000,000 lines of code.

But online communities are more than simply free and open source software. For instance,

social networking sites such as Facebook and MySpace, which have memberships of

millions, have grown rapidly, allowing individuals to share experiences and socialize with

each other. From initially being exclusively for participation by Harvard students, Facebook,

according to recent estimates, now has more than 60 million users worldwide. The popular

press has been swift to document these successes, and it is tempting to conclude that

online communities have great potential. Yet, their diversity, in terms of objectives, typology

of organization, production and reasons behind individuals’ use of them, is becoming

obvious.