Re:The latest on Messages, Allo, Duo and Hangouts
by beagle3 on Thursday December 06, 2018 @05:48PM
(#18623222)
What you are describing is called "compounding" in Economics, but that's not a network effect. You might want to read [0]
Microsoft has the money to to host and curate a large search index, funded by their other businesses. And after more than a decade, they've gotten almost nowhere -- everyone I know who tried Bing (or DDG) goes back to Google for quality.
Whereas e.g. Facebook and WhatsApp do have a network effect - you have no use for them unless your friends use them too, so a new contender - no matter how well funded e.g. Google+ - is not useful until critical mass is achieved; and critical mass is not achieved until it is useful.
Not true. Their advertising business is absolutely built on network effects. Advertisers advertise where there is user data (anything else is a money losing proposition), and lots of user data collection only happens in services that have the money to host (and curate) a large search index, which in turn needs a healthy and growing ad business.
It's a self-serving cycle that eventually leads to one player becoming the monopoly.
(Same deal with social networks, though less pronounced.)