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This is a neat article, but I'm distracted by a thought only tangentially related: What does it mean that Facebook has a monopoly through the network effect? S

This is a neat article, but I'm distracted by a thought only tangentially related: What does it mean that Facebook has a monopoly through the network effect? So - Diamonds. Classic monopoly. Physical good, limited natural supply captured completely by a single business entity. (Notably, AFAIK, the same is true for Areva and nuclear fuel). Microsoft. Monopoly. Software goods. Their monopoly was achieved (AFAIK) through business deals and a quality-enough+ product. Has nothing to do with available supply. Facebook. Network-powered monopoly. Achieved through a good product, maintained by good-enough+ and the network effect (and their adaptability). The number one hurdle for any FB "killer" (as opposed to unbundlers - arguably, Instagram, as an example) is competing with FB's network effect. There's zero supply that FB has controlled to maintain it's monopoly. I'm not sure where this thought wants to go, but I'm trying to think up other categories or interesting things that fall into these categories. Thoughts?

fiatjaf 10y ago
I was about to write something like this. This is not a monopoly in any normal meaning that word is used. It is the network effect.
bigbugbag 10y ago
> So - Diamonds. Classic monopoly. Physical good, limited natural supply captured completely by a single business entity. You should reconsider using diamonds as examples and analogy: https://priceonomics.com/post/45768546804/diamonds-are-bullshit https://priceonomics.com/post/45768546804/diamonds-are-bulls... It seems to me the reason you don't understand facebook monopoly because you seem to believe it was achieved through a good product which is not at all how it happened, (if the product is any good it's for facebook). They got there through a lot of tricks from the black book of shunned upon dark tricks to control supply (new registered users). They kickstarted by seizing the universities students in ways that got them a lot of flak at the time then grew further by breaking their initial promises and more black book tricks and dark patterns. Once they reached critical mass and user lock-in, the people themselves would recruit new users and further improve network effect. There's also the shadow side that happened behind the scenes and can be pinpointed to around the time of Peter Thiel involvement. So "Facebook has a monopoly through network effect" means that due to the sheer number of people registered it has an effective monopoly. If you peruse the HN comments (or elsewhere) about facebook you will often see people that complains about facebook being a pile of crap that they can't leave because other people they want to stay to stay in touch are all there and some are only there. This is monopoly through network effect.
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adamlett 10y ago
Ben Thomson has actually written about it previously: https://stratechery.com/2017/manifestos-and-monopolies/ https://stratechery.com/2017/manifestos-and-monopolies/
nebabyte 10y ago
> Thoughts? Sure. > Facebook. Network-powered monopoly. My ass. In next to no sense of the word does FB still have a monopoly. Most people have left for 'greener pastures' and while most other social networks center around a different mode of content sharing, people are much more fluidly moving across networks than they did back in the "fb vs myspace" days. > it's its

fiatjaf 10y ago

I was about to write something like this. This is not a monopoly in any normal meaning that word is used. It is the network effect.

bigbugbag 10y ago

> So - Diamonds. Classic monopoly. Physical good, limited natural supply captured completely by a single business entity. You should reconsider using diamonds as examples and analogy: https://priceonomics.com/post/45768546804/diamonds-are-bullshit https://priceonomics.com/post/45768546804/diamonds-are-bulls... It seems to me the reason you don't understand facebook monopoly because you seem to believe it was achieved through a good product which is not at all how it happened, (if the product is any good it's for facebook). They got there through a lot of tricks from the black book of shunned upon dark tricks to control supply (new registered users). They kickstarted by seizing the universities students in ways that got them a lot of flak at the time then grew further by breaking their initial promises and more black book tricks and dark patterns. Once they reached critical mass and user lock-in, the people themselves would recruit new users and further improve network effect. There's also the shadow side that happened behind the scenes and can be pinpointed to around the time of Peter Thiel involvement. So "Facebook has a monopoly through network effect" means that due to the sheer number of people registered it has an effective monopoly. If you peruse the HN comments (or elsewhere) about facebook you will often see people that complains about facebook being a pile of crap that they can't leave because other people they want to stay to stay in touch are all there and some are only there. This is monopoly through network effect.

deleted 10y ago
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adamlett 10y ago

Ben Thomson has actually written about it previously: https://stratechery.com/2017/manifestos-and-monopolies/ https://stratechery.com/2017/manifestos-and-monopolies/

nebabyte 10y ago

> Thoughts? Sure. > Facebook. Network-powered monopoly. My ass. In next to no sense of the word does FB still have a monopoly. Most people have left for 'greener pastures' and while most other social networks center around a different mode of content sharing, people are much more fluidly moving across networks than they did back in the "fb vs myspace" days. > it's its