Recently, Facebook opened up its server design.

Both Google and Facebook as competitors in the same industry: advertising.

Strictly speaking, they don’t compete in the hardware arena.

Google’s actions indicate that it believes that its hardware designs give it an advantage in the processing and delivery of advertising.  Keeping these designs a trade secret is to its advantage.  (It is worth noting that they do share some details of its designs.)

In contrast, Facebook believes that using an Open Source philosophy for its hardware gives it an advantage.  Facebook will now be able to receive input from outside designers and take advantage of economies of scale as their designs are produced for more customers.

Jon Stoke’s analysis at Ars Technica is correct in that Facebook “doesn’t have to beat Google to win. Rather, the move will be a success if it only serves to shrink some of Google’s relative advantage. Anything that lets Facebook become more competitive by eliminating some of Google’s advantage in delivering ads cheaply will be a success.”

Ultimately Google and Facebook are both acting as rational profit-seekers, though they have chosen different strategies.

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