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To a certain degree this is true. I think the major reason for why we see a "winner-take-all" effect on the internet is because of data persistence. Usually the
by akg 15y ago
To a certain degree this is true. I think the major reason for why we see a "winner-take-all" effect on the internet is because of data persistence. Usually the usage pattern for brick-and-motor stores is that you visit it, get what you need, get out. With online services, however, the more data a site has, the more useful it becomes (e.g., social networks or Amazon's recommendation system). I think people subconsciously realize this and start to focus on one attractable service over another.
On the other hand, the ease of dissemination of products/services to users via the internet makes it so that niche markets are more efficiently served. This is usually harder to do with brick-and-mortar stores due to locality constraints. So even though, there might be "one big winner" there seems to be a growing market for niche products.
- draggnar 15y agoI agree with you. While McDonald's can be the "winner-take-all" for food on the highway, being able to serve smaller and smaller niches due to larger distribution means that there may be only one winner for a very particular product. This niche may well open up entire new markets for further products and services. Instead of trending towards oligopolies I would argue that the internet allows what would otherwise be a tiny unprofitable niche to develop into an entire market on its own with related services.
- akg 15y agoExactly. I will also add that having one "winner takes all" is not necessarily a bad thing. Think about Wikipedia. The reason it is so useful as a tool is because it is the central portal for information retrieval and submission.
- nerfhammer 15y agoIt's a classic network effect. Wikipedia is popular because it is popular. Because its popular it gets more users, with more users it gets more and better articles written, with more articles written it gets more popular. Once that critical mass is achieved its very difficult for anything else to provide a better service.