According to knowledge based view, firm-specific knowledge is considered to be a foundational source of competitive advantage. However, the recent trend towards social software radically changes the very essence, role, and value of firm-specific knowledge in driving competitive advantage. On one hand, firms are very enthusiastic about the investments in the social software initiatives; on the other hand, the broader strategic impact of these initiatives is not clear yet. This position paper highlights deep-seated problems in applying prominent strategic management theories in the context of social software. To address these problems, drawing on literature on value co-creation and service logic, it describes four ways social software can enable a firm’s competitive advantage, and call for more research in this area.