Power in networks is clearly visible in the financial world.  Investment banking, with the buying and selling of stocks on a stock exchange is all about network exchange theory.  On a larger scale, corporations are constantly upgrading and improving their product to reach new consumers that would otherwise go to other companies.  An example that is prominent in the business news today is Microsoft’s bid for Yahoo!.  Microsoft has openly been pursuing Yahoo! for some time now but it made it’s official bid at the beginning of January this year.  Yahoo! refused this stating that it was too low of a bid.  Yahoo! is now looking for new bidders to either drive up the offered price of Microsoft or to dilute the control the power and prevent a hostile takeover.

Competitors of Yahoo!, specifically Google, are threatened by this potential deal and look to prevent this merger from happening because they would lose their dominance on the market. It is also worth mentioning that Google is unable to bid for Yahoo! itself because of industry regulations (which basically prevent monopolies).  

http://business.timesonline.co.uk/tol/business/industry_sectors/technology/article3419923.ece This particular article from the Times in London describes Google’s search for regulatory institutions to intervene and investigate this merger because it does not want the deal to go through.

The web provides a structure for all kinds of networking; whether they are social, financial, or any other type. This deal is directly related to the way we obtain information and network on the Internet. If the merger were to go through, the new Microsoft-Yahoo! would create a huge dominance in the web search, mail, and advertising markets.

This relates to the concept of network exchange theory that considers buyers and sellers.  The strategy of Yahoo! is to find other buyers to provide some kind of competition for Microsoft and in turn, create a “game”.  There aren’t many other companies that can afford to offer to outbid Microsoft, but if there was, the dominant strategy that Microsoft would choose would end up being more profitable for the seller.  We have learned from class that the more options that a seller has, the more power they have.  In this specific case, the more options (buyers) Yahoo! has, the less likely they will lose control of their own company, preventing a hostile takeover by Microsoft.

 http://business.timesonline.co.uk/tol/business/columnists/article3422406.ece