But do nt let the dull names f o o l yo uthis co

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: d services subject to network effects. Net work ef f ect s are so metimes ref erred to as “Metcalf e’s Law” o r “netwo rk externalities.” But do n’t let the dull names f o o l yo u—this co ncept is ro cket f uel f o r techno lo gy f irms. Bill Gates leveraged netwo rk ef f ects to turn Windo ws and Of f ice into virtual mo no po lies and in the pro cess became the wealthiest man in America. Mark Zuckerberg o f Facebo o k, Sergey Brin and Larry P age o f Go o gle, P ierre Omidyar o f eBay, Andrew Maso n o f Gro upo n, Evan Williams and Biz Sto ne o f Twitter, Nik Zennströ m and Janus Friis o f Skype, Steve Chen and Chad Hurley o f Yo uTube, all these entrepreneurs have built massive user bases by leveraging the co ncept. When netwo rk ef f ects are present, the v alue o f a pro duct o r serv ice increases as the number o f users gro w s. Simply, mo re users = mo re value. Of co urse, mo st pro ducts aren’t subject to netwo rk ef f ects—yo u pro bably do n’t care if so meo ne wears the same so cks, uses the same pancake syru...
View Full Document

This document was uploaded on 01/31/2014.

Ask a homework question - tutors are online