Network Effects in Facebook’s Earnings Report
Here in this article titled “Facebook Earnings Reflect Epic Network Effect” the author talks about how Facebook is benefiting from the rich get richer idea that is presented in the book. the fact that Facebook is one of the most popular websites in the world, helps it as it moves into new fields. As Facebook looks to move into the artificial intelligence field as well as the virtual reality field, it has the background and help of 1 in 7 people in the world visiting it every day.
Steve Rosenbush in this article says this about Facebook’s third quarter earnings. “It’s a perfect illustration of the winner-take-all tendency in technology, the network effect writ large.” Because Facebook already has such large world presence, any time it comes out with a new product, it already has the advantage of a large user base to test it on, and to advertise too. Thus the popular site gets even more popular through other streams of revenue, and other products. Additionally, Facebook benefits form the network effect because it has the ability to earn revenue from everyone being connected on its network, while still investing in future products and ideas like the aforementioned virtual reality and artificial intelligence. If you would like to read this short article the link is below.
http://blogs.wsj.com/cio/2015/11/05/the-morning-download-facebook-earnings-reflect-epic-network-effect/