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Tech Titans

Article referenced: http://www.wsj.com/articles/giants-tighten-grip-on-internet-economy-1446771732

The attached article discusses the effects a few large, successful companies have on today’s advertising and flow of goods. Examples of such companies include Facebook, Google, and Amazon. Facebook and Google dominate the advertisement industry, of which comprise a huge fraction of their revenue, and Amazon is the largest online retailer right now. Businesses and startups are almost forced in a practical sense to use the platforms of these tech titans – publishing videos to Google’s YouTube, ads to Google Search and Facebook’s News Feed, making PR pages on Facebook to reach the huge audience it provides, and if in retail, selling on Amazon. Because of the grasp these companies have of their respective industries, it looks impossible to ever compete with these titans with their seemingly infinite resources that they are established in.

This phenomenon has been covered in our Networks class, where we have discussed the Rich-Get-Richer process. In this process, those with more money or resources can then use those means to improve their product and increase their audience, which then usually results in even more money or resources – a positive spiral. Even companies or startups that one day may hope to compete against these titans find themselves needing to depend on the platforms or products these bigger companies already provide. The large user base or audience these companies have are also an example of how powerful the effects of information cascade can be as the number of users grow.

 

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