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Network effects are not limited to products that connect users. A network effect is when more usage increases the value of the product [1]. More Google users me
by mgummelt 9y ago
Network effects are not limited to products that connect users. A network effect is when more usage increases the value of the product [1]. More Google users means more click data, which means better search ranking.
But yes, Google also has scale economies.
[1] https://en.m.wikipedia.org/wiki/Network_effect https://en.m.wikipedia.org/wiki/Network_effect
- wpietri 9y agoI don't think that qualifies, as network effects keep increasing with the size of the network. Click data's value tails off pretty rapidly once you nail the top few things that people click on, which is the great bulk of the usage.
- mgummelt 9y agoIt's actually exactly the opposite. Google's most valuable data is the long tail, which is substantial in search, since they have some data for rare searches, whereas Bing as none.