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You define a business based on customers and costs: 1. Facebook's customers are advertisers. 2. Facebook's costs are for IT systems development, infrastruct
by fuzzieozzie 9y ago
You define a business based on customers and costs:
1. Facebook's customers are advertisers.
2. Facebook's costs are for IT systems development, infrastructure and operations.
As such it competes with other advertisers: e.g. Google, TV broadcasters, et.c.
The fact that it does this using a "social network" has nothing to do with the question!
- eesmith 9y agoAnti-monopoly has a different set of criteria to determine the relevant market, where a company with market power might be able to abuse that power. The three points listed at https://en.wikipedia.org/wiki/Relevant_market https://en.wikipedia.org/wiki/Relevant_market are 1) demand-side substitution, 2) supply-side substitution, and 3) potential competition. If FB were to change its fees or policies, can 5%-10% of the advertisers who are currently using FB switch to Google, TV broadcasters, etc. to get a roughly equivalent service? If not, that would suggest FB is also in a more specific market than 'advertising', and has market power in that market.