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David S. Evans Quotes

Total quotes: 3
“But the new economics of multisided platforms, which we explore in detail in Matchmakers, shows that the winner-takes-all theory doesn’t describe most internet platforms. What markets have these companies actually won? If you think Google is the winner in search, Facebook in social networks, and Twitter in microblogging, you might be half right. They might have “won” the ability to give people certain kinds of content and services for free. But all of these companies pay investors, at least in part, by selling advertising to marketers who want to reach more eyeballs. None of them have “won” that side of the market. In fact, they are all competing with many others for advertiser dollars.”
— David S. Evans, Richard Schmalensee, Why Winner-Takes-All Thinking Doesn’t Apply to the Platform Economy
Tagged: The Present Of Media, Facebook, Google, Platforms, Network Effects
“Experience also shows us that that network effects can also work in reverse, and destroy value with explosive speed. This has happened to many shopping malls. When consumer traffic drops a little, a few stores leave, the mall becomes less attractive. Then traffic reduces a little more, more stores leave, and the mall officially shutters. Internet companies, such as MySpace in the U.S., and Orkut in Brazil and India, have suffered similar fates as well.”
— David S. Evans, Richard Schmalensee, Why Winner-Takes-All Thinking Doesn’t Apply to the Platform Economy
Tagged: The Present Of Media, Facebook, Google, Platforms, Network Effects
“The problem is that network effects just aren’t as durable as they used to be...Currently, modern technology — fueled by software, the internet, and the cloud — makes it possible for a challenger to enter the market at minimal cost. Price competition doesn’t matter much since the winner that took all isn’t charging anything to some of its customers anyway —no one pays to send or receive messages on WhatsApp, for example. And, most importantly, it’s easier to reach consumers. Competition may not be “just a click away,” as internet giants often tell regulators, but it’s sure a lot easier to start an online platform than it was to build a telephone network.”
— David S. Evans, Richard Schmalensee, Why Winner-Takes-All Thinking Doesn’t Apply to the Platform Economy
Tagged: The Present Of Media, Facebook, Google, Platforms, Network Effects
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