The Super-aggregators

Ben Thompson of Stratechery writes of Facebook & to a lesser extent Google’s model here:

What makes Facebook and Google unique is that not only do they have zero transaction costs when it comes to serving end users, they also have zero transaction costs when it comes to both suppliers and advertisers.

An interesting way to think about it; Facebook’s suppliers are its users, since they produce the content; this attracts and retains other “suppliers” – you and me, the friends of those on Facebook, and in turn that gives Facebook its “product” that it sells to its market, the advertisers.

Facebook doesn’t really do much work in between – sure, yes, they host the site, and make it possible to share thousands of photos and videos and whatnot – but they don’t need to make that happen on a personally-involved scale; they don’t call you to post on your profile to pull in other people who are also simultaneously shown ads.

Facebook and Google seem to be unique in this position – other networks don’t seem to have scaled in that same way, which is what makes Facebook & Google the “super aggregators”, and chances are their combined power wil eventually swamp the other also-rans that didn’t make it to that level of power.

(Note also: Facebook et al make the best attempt to steal the sole resource you have that is non-renewble, your time.)

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