Comments on: Life before (without?) the Network Effect http://www.raydeck.com/2005/12/bokardo-%c2%bb-blog-archive-%c2%bb-learning-more-about-structured-blogging/ Startup perspective on the business of technology Thu, 20 Nov 2008 20:55:24 +0000 http://wordpress.org/?v=2.0.1 by: The Keystone of Building Network Value at Disruptive Thoughts http://www.raydeck.com/2005/12/bokardo-%c2%bb-blog-archive-%c2%bb-learning-more-about-structured-blogging/#comment-147 Tue, 25 Apr 2006 00:29:05 +0000 http://www.raydeck.com/2005/12/bokardo-%c2%bb-blog-archive-%c2%bb-learning-more-about-structured-blogging/#comment-147 [...] Ray Deck The problem with relying on network effects is that if the first few users don’t get value, there’s no way you’re going to get 10,000 to form substantive network effects. [...] […] Ray Deck The problem with relying on network effects is that if the first few users don’t get value, there’s no way you’re going to get 10,000 to form substantive network effects. […]

]]> by: Dharmesh Shah http://www.raydeck.com/2005/12/bokardo-%c2%bb-blog-archive-%c2%bb-learning-more-about-structured-blogging/#comment-12 Sat, 11 Feb 2006 13:58:20 +0000 http://www.raydeck.com/2005/12/bokardo-%c2%bb-blog-archive-%c2%bb-learning-more-about-structured-blogging/#comment-12 Another big issue with these advertising-driven business models is that there are currently a very limited number of "suppliers" and these suppliers have significant power over the relationship. For example, Google, with AdSense is by far the market leader for providing the advertising revenue stream for many of these sites. Google has not been known to be particularly transparent with regards to revenue generated, what percentage they keep, etc. Also, there's nothing stopping them from changing deal-terms (including "pricing") at their will. This is a classical example of where a critical supplier wields too much power, and this creates an inheret challenge for the web site/service owner/opeartors. Another big issue with these advertising-driven business models is that there are currently a very limited number of “suppliers” and these suppliers have significant power over the relationship.

For example, Google, with AdSense is by far the market leader for providing the advertising revenue stream for many of these sites. Google has not been known to be particularly transparent with regards to revenue generated, what percentage they keep, etc. Also, there’s nothing stopping them from changing deal-terms (including “pricing”) at their will.

This is a classical example of where a critical supplier wields too much power, and this creates an inheret challenge for the web site/service owner/opeartors.

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