High Order Bit: The Rise of the Network Company
summary
Argument: companies that build and control active communication networks create superlinear economic value and will dominate the next decade, not firms that merely index information. Networks obey Metcalfe‑style growth where value scales roughly as the square of participants, so switching costs become exponential. Evidence: eBay’s 1998 surge (eBay doubles while Onsale grows 25%) shows lock‑in; Skype reaches 521 million registered users and ~$740M run rate, showing monetization follows scale. Facebook’s campus beachhead strategy converts local density into global market takeover.
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chapters (14)
- 0:00Intro
- 1:38WHAT ARE NETWORK EFFECTS?
- 2:10THE POWER OF NETWORKS
- 2:50METCALFE'S LAW
- 3:47INFORMATIONS SERVICES VS. NETWORK SERVICES
- 4:47A NATURAL MONOPOLY: EBAY
- 6:06WHY DID EBAY BUY SKYPE?
- 8:08THE FALL OF FRIENDSTER
- 8:35FACEBOOK VS. MYSPACE
- 8:46HOW THE HELL DID MYSPACE LET THIS HAPPEN?
- 10:06BATTLE FOR GERMANY
- 10:19DATA PORTABILITY IS A RED HERRING
- 11:17GOOGLE DOESN'T OWN NETWORKS
- 12:09CLOSING THOUGHTS
