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> they're the monopoly because they are the best in many ways, mostly not because of network effects or anti-competitive behaviour Not true. Their advertising
by otabdeveloper1 8y ago
> they're the monopoly because they are the best in many ways, mostly not because of network effects or anti-competitive behaviour
Not true. Their advertising business is absolutely built on network effects. Advertisers advertise where there is user data (anything else is a money losing proposition), and lots of user data collection only happens in services that have the money to host (and curate) a large search index, which in turn needs a healthy and growing ad business.
It's a self-serving cycle that eventually leads to one player becoming the monopoly.
(Same deal with social networks, though less pronounced.)
- beagle3 8y agoWhat you are describing is called "compounding" in Economics, but that's not a network effect. You might want to read [0] Microsoft has the money to to host and curate a large search index, funded by their other businesses. And after more than a decade, they've gotten almost nowhere -- everyone I know who tried Bing (or DDG) goes back to Google for quality. Whereas e.g. Facebook and WhatsApp do have a network effect - you have no use for them unless your friends use them too, so a new contender - no matter how well funded e.g. Google+ - is not useful until critical mass is achieved; and critical mass is not achieved until it is useful. [0] https://en.wikipedia.org/wiki/Network_effect https://en.wikipedia.org/wiki/Network_effect