“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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Why Winner-Takes-All Thinking Doesn’t Apply to the Platform Economy hbr.org

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