Facebook and the Cost of Monopoly – Stratechery by Ben Thompson: "The problem is that Facebook isn’t simply a social network: the service is a three-sided market — users, content providers, and advertisers — and while the basis of Facebook’s dominance is in the network effects that come from connecting all of those users, said dominance has seeped to those other sides.
Content providers are an obvious example: Facebook passed Google as the top traffic driver back in 2015, and as of last fall drove over 40% of traffic for the average site, even after an algorithm change that reduced publisher reach.
So is that a monopoly when it comes to the content provider market? I would argue yes, thanks to the monopoly framework above.
Note that once again we are in a situation where there is not a clear price: no content provider pays Facebook to post a link (although they can obviously make said link into an advertisement). However, Facebook does, at least indirectly, make money from that content: the more users find said content engaging, the more time they will spend on Facebook, which means the more ads they will see." 'via Blog this'
No comments:
Post a Comment