The Role of Boundary Resources in Ecosystem Innovation: A Study of Facebook's Evolution

Abstract

This paper explores digital ecosystem innovation through a study of Facebook’s evolution. It focuses on the platform’s boundary resources, that is, the interfaces, shared technology tools, and rule systems that shape and govern the platform relationships with third-party developers, advertisers, and businesses. The empirical study analyzes 1,215 posts from Facebook’s public blog called “News for Developers” in the period 2006 to 2021 that communicate changes in the platform’s boundary resources to third parties. The results of the study indicate that Facebook has evolved from a social networking site focused primarily on providing features to end-users and with limited offerings to third parties, to a complex ecosystem that currently provides a variety of resources to external developers and businesses. The papers finds that the growing variety and specialization of boundary resources together with Facebook’s shift toward a rule-based ecosystem governance has brought about the emergence of new complementary interactions among ecosystem members that have been structured and carried out through data. These specific types of data synergies, or data complementarities, in turn led to increased diversification of offerings and to the establishment of innovative services and new businesses.

Keywords: innovation, ecosystems, platforms, digital innovation, data, data complementarities, Facebook, evolution, boundary resources, interfaces, governance