I would say the value of an idea is inversely related to the difficulty to execute the idea. The idea for the million dollar homepage was extremely valuable because the execution of the idea wasn't too technically difficult. There are plenty of freelancers who could implement that idea. Same with the idea for ChatRoulette and Groupon. If an idea is really difficult to implement, such as a better Google, then the idea is much less valuable than execution.

But if the idea is easy to implement than anyone will be able to copy that idea and the value will tend to zero.

My strategy is the opposite - take ideas that are often simple to state but whose execution is so complex as to tax the limits of the human mind. Then if I succeed I shouldn't have to worry much about competition (at least for a couple of years).

Easy to implement ideas are easy to copy, but that doesn't necessarily mean the value of the idea will tend to zero. See Woot, Groupon, Craigslist, etc. There are network effects and first mover advantages that help the first to implement an idea and gain traction. I would say your strategy follows my point. In your case, the ideas that are often simple to state aren't valuable. The value is all in the execution.

You have a good point.

I often wonder why the software and internet businesses seem so strongly winner take all, where the winner is most typically not the first but the best (in a sense measured by the market) to execute an idea (ie. Microsoft, Google, Facebook). It seems like the classical economic view of competitive markets is becoming more and more of a fantasy world.

Yeah, it's interesting. The reasons vary for each company and books could probably be written for each one. A key factor is network effects. Read up on network effects: http://en.wikipedia.org/wiki/Network_effect

"In economics and business, a network effect (also called network externality) is the effect that one user of a good or service has on the value of that product to other people. When network effect is present, the value of a product or service increases as more people use it."

Not just internet and software businesses, railroads, telephone networks, and financial markets are other businesses that are impacted by network effects.

It seems to me that the ideas that you call valuable (ChatRoulette, Million Dollar Homepage), are recipes for shooting stars: they become popular overnight but have little staying power. By contrast, dumb me-too ideas (Google, Apple, Facebook, Twitter, Zappos), when executed well, can create lasting businesses. Does anyone have counterexamples?

The Million Dollar Homepage may be a shooting star, but it is certainly valuable idea. You can make a decent living if you come up with an idea like it every year.

I would argue that Chatroulette has staying power. It's not as popular as it was during the media hoopla, but they still get 250k users day. That's not Facebook or Twitter or Tumblr, but that's enough to get by.

I would also look at Groupon, Woot, and HARO. Simple ideas that have created sustainable businesses.

I think ICQ is a counter example. based on great idea(for that time) and got viral very fast. stayed strong for a couple of years. Microsoft has beaten it , using it's windows platform, so in a fair world , ICQ might have become the winner.