
Why Facebook Keeps Beating Every Rival: It’s the Network, of Course - sonabinu
https://www.nytimes.com/2017/04/19/technology/facebook-snapchat-instagram-innovation.html
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joshjkim
This is a good start, but I think there could be a lot more thought given to
how we should think about monopolies in the context of markets where networks
effects are crucial to the business value (aka. Facebook and Google most
obviously, arguably Amazon, Apple), because one logical conclusion is that in
a market where network effects are a major factor, the biggest network should
be best positioned to provide the most value and therefore (assuming it
doesn't actively eff things up on other fronts) should continue to grow until
it dominates the market...which seems to pretty much be what happened, and it
makes pretty good sense for the most part. in these cases, it actually seems
BAD to break these networks apart, since their scale is arguably one of its
primary values to the customer - this doesn't mean of course that they can't
abuse their monopoly powers (I think they probably do to some degree and will
continue to), but interesting to think that the traditional "break up
monopolies" impulse doesn't make as much sense. this leads me to think it will
just be more consumer-protection-related regulation (under the banner of
consumer privacy, or maybe even public health, given all the "social media
addiction" thought pieces out there these days ha).

One thing I've found super interesting/impressive about Snap is that it didn't
try to outcompete FB in terms of sheer network size for its usage stickiness,
and instead turned smaller, tighter and more private networks into a
differentiator, while at the same time providing advertisers/brands with a
competitively massive audience - not an easy thing to identify, much less
execute on. TBD if that differentiator is enough to keep them alive vs. FB's
more traditional network-effect-driven advantage, which will be hard to beat
on its own terms. I think Snap's success will depend a lot on its ability to
avoid being tempted to play that game (see: Twitter!).

random other thought: this all also reminds me that Mark Zuckerberg has not
made a peep about wanting FB to be thought of as a "utility" in a long time
(or maybe he has and I just missed it...but couldn't find any recent
mentions), probably in part because they are now a lot more at risk than ever
before of being regulated like one (see this talk from 2013:
[https://techcrunch.com/2013/09/18/facebook-doesnt-want-to-
be...](https://techcrunch.com/2013/09/18/facebook-doesnt-want-to-be...)). Also
kind of funny to hear him talk about "we don't want FB to be cool" too,
because now it seems like FB very much wants to be cool again now that Snap
has become cool and has threatening user counts.

