The Master of Network Effects
This article talks about how Microsoft and Google utilized network effects to gain popularity among us. Microsoft did this really well because they were dominant in the PC market. Because they were able to attract software developers and consumers to use Windows, more people began to use the OS. This attracted third-party developers to build products for Windows, attracting even more people to join Windows.
However, Google is now the new master of network effects because in the internet domain, they are triumphant over Microsoft. Google has a much bigger lead in Internet search advertising because it is a “finally honed machine.” Google has an advantage because it learns while doing, leaving Microsoft further behind. And because Google has such a large share of users in the market, it will only increase in popularity. More users will be attracted to Google’s popularity, creating a snowball effect of those who use Google and making it even more difficult for other companies like Microsoft to catch up.
This relates to what we learned in class because this article talks about the success of a product and the network effects associated with it. Google’s search engine and search advertising are the products and the popularity of these products keep increasing since it’s past the tipping point. However, since Microsoft is having a harder time catching up to Google, they going below the tipping point because less of the population is interested in their product of internet search advertising.