ight, hotel, local transportation, and other reservation services). Once these services are inte- grated through the development of appropriate interfaces infinite reuse of existing components with no further integration or assembly costs is possible. However, this can lead to complex value networks with different actors working together in a federated service environment. This leads to complex value constellation in distrib- uted networks which are harder to manage with the increased number of involved actors (Vanhaverbeke and Cloodt, 2006). 7.2.3 Rapid Development of New Services A differentiation strategy is difficult to attain as services can be copied easily and are not applicable to patent protection (Porter, 2001; Hipp and Grupp, 2005). Consequently, only continuous innovation can lead to economic success. However, these effects common to all service areas are magnified in the area of electronic services. Advances in electronic services are particularly rapid and low barriers of entry have been attributed to electronic services (cf. Evans and Wurster, 2000; Porter, 2001; Menor et al., 2002). This rapid development is further fueled by extremely fast technological progress and fast emerging of technologies. This fast technological progress not only creates opportunities for new service concepts, but also affects customers' expectations and preferences which require constant innova- tions (e.g., all the electronic services offered on the Apple iPhone store which was just created through the advances in mobile phone technology). Furthermore, the very nature of electronic services benefits radical innovation through major innova- tions and start-up businesses (Johnson et al., 2000; Menor et al., 2002). 7.2.4 Transparent Service Feedback Through the electronic nature of service delivery, the interaction between a service consumer and the service itself becomes very transparent. A simple example of this Service Innovation for Electronic Services effect is the monitoring of click-through-rates in online shops. Th