The major theme of this week’s readings was how important social interactions on the internet are. I’m not very business savvy so a lot of the material in chapter 6 was new to me. The concept of network effects is pretty intuitive, the more users a service has the more users it will continue to get. It’s an exponential increase rather than a linear model. I had definitely never heard of one-sided or two sided markets before or same-side or cross-side exchange benefits before. From what I understand now a one-sided market gets its value from just one type of users where as a two-sided market gets its value from two different participants in the business. Same-side exchange benefits are the increases of a product’s value caused by more use by just one type of user. Cross-side exchange benefits are the increases of a market when one type of user grows in size which then causes another type of user to grow in size.
These network effects are most notable in the social media industry. Facebook started small but because it was the first of it’s kind it and had attractive personal features it was able to quickly gain a large number of users. The number of users has since increased dramatically because people want to communicate where the largest amount of other people are communicating. This network effect can make it difficult for other companies to be successful in social media because why would someone join a new social media site when all of their friends are already on Facebook? Even the behemoth Google has seemingly failed at competing with Facebook. It released Google+ a few years ago and I signed up out of curiosity but I almost never check it because no one else is on there. Everyone is already on Facebook and Google+ didn’t offer enough new and better features to make up for it’s lack of popularity. This isn’t to say that network effects are impossible to overcome for new social media platforms but they have to do something different than Facebook to attract users.
Blogs like this one allow authors to write long-type posts to fully express their opinions and work online in a custom format. Facebook is meant for just connecting and sharing with others, not in depth analysis. Wikis also provide a service that’s very different from other social media formats. They crowd source information and use healthy amounts of moderation to organize heaps of data in a meaningful and understandable way. Microblogs like Twitter are interesting because they limit the amount of characters an author can type but this limitation increases the speed at which the information can be delivered. I personally use Twitter, and Reddit to an extent, for most of my news, at least as a source of links for news. As a medium Twitter doesn’t require users to be particularly active participants for it to be engaging, unlike Facebook and standard blogs. Despite that I’ve sent out maybe 50 tweets in my 3+ years of having a Twitter account I check it almost daily for different news ranging from basketball to statistics to weather forecasts to politics.
Social media has changed how humans interact and I think that despite the privacy concerns the change is for the better.