The concept of network effect has been taught by B-school professors as a rule or law rather than a theory. Not enough research has been done to show how netwo

The concept of network effect has been taught by B-school professors as a rule or law rather than a theory. Not enough research has been done to show how network effect can be broken up since it is just recently (last 10 years or so) been taught. 5 years ago, before Facebook started stealing MySpace’s users, you could have put the same wiki link and said the same thing. One could even argue that Facebook is destroying their network effect by not allowing people to see all posts. The fact that Linkedin, Meetup, Twitter, heck even the new myspace all exist, there are lots of networks with varying degrees of network effects which could slowly take facebook share until the tipping point is crossed. I’m not predicting facebook’s demise, rather I’m stating that network effects are important, but have not been proven to create a long term sustainable competitive advantage.