9 comments

• 

  Brad

  8 months ago

  The difference is that Google's "network effect" was not internal. The network effect only really refers to something that builds internal momentum and grows exponentially. This does not apply to Google because their growth was not directly effecting the growth of the network.
  reply
• 

  mathewi

  8 months ago

  It may not be internally generated, Brad, but I disagree that the network effect is something completely external to Google -- links that appear highly in Google are in turn linked to by lots of sites, which reinforces the extent to which they are seen as valuable. There's a definite symbiotic network effect at work there, I think.
  reply
• 

  Femi

  8 months ago

  it seems so obvious that network effect is a huge part of google's success. i don't get it.
  wouldn't you argue that the google advertising model is one of the best examples of the network effect? and that's what made them so successful!
  reply
• 

  Mark Hendrickson

  8 months ago

  You're confusing the idea that Google has benefited tremendously from the Web's network of pages with the altogether different idea that it has achieved its success through the establishment of a network effect.
  
  A service that enjoys a network effect gains value simply by having more people participate in it directly. Often, this value gets so large that users are reluctant to use competing services that don't have as many users (bars and parties, by the way, experience this exact phenomenon all the time -- who wants to hang out at an empty drinking hole when there's a rager next door?).
  
  Ebay and Facebook both owe their successes (in large part) to the network effect because they managed to establish attractive user bases early on that then enticed many others to jump aboard instead of going elsewhere.
  
  Google, on the other hand, doesn't get much more fun or useful if ten of my friends start using it. Sure, it does get more useful if ten of my friends start to blog or create websites (as do Yahoo and Live Search). But it's a contortion of the term "network effect" to suggest that this is the same type of scenario as the one above simply because it involves a "network" of people or things in a general sense.
  reply
• 

  mathewi

  8 months ago

  Thanks for the comment, Mark -- as I said in my reply to Brad above, I know that Google didn't invent the network effect that it benefits from. But at the same time, I don't see how Nick can make the statement that Google's success has "nothing to do with the network effect." That's just not true.
  reply
• 

  Michael Masnick

  8 months ago

  Now, I'm one who tends to believe that Nick Carr is almost always wrong, because time and time again he has been shown to have been wrong, but on this one, I think he's making a good point (and trust me, I'm surprised that I'm saying this). Google's success with users is not due to a network effect among *users* -- which is the point that Tim was making. There are different network effects that you're talking about and that Nick are talking about. You're talking about the network effects that Google leveraged to make its service useful, but that isn't impacted by how many people use it, and those same network effects can be replicated without getting users.
  
  The network effects that Nick is talking about are ones where it's the user-generated-network effects that matter. And, for the most part, Google isn't built off of that.
  reply
• 

  mathewi

  8 months ago

  You're right, Mike -- and I realize that what I'm describing doesn't really fit the definition. But as I said to Brad in my reply above, I think Google is inextricably linked with the network effect created by the Web. And I don't see how Nick can say that the network effect had absolutely nothing to do with Google's success. That just doesn't make any sense.
  reply
• 

  alistairc

  8 months ago

  Yeah, this is splitting hairs.
  
  Google relies on links to find relevance. More links to more places means better data. Advantage O'Reilly.
  
  But Google itself is just as useful whether I'm the only one using it, or whether the whole world is. It's not like a telephone, where having the only one is useless. Advantage Carr.
  
  Ultimately, however, Google gets tremendous advantages from its use. Carr ignores things like navigational search, or the use of the Google toolbar. Why? Because those wily crawlers need to know what to crawl; so when someone types a URL into a search instead of an address (which they do 20 percent of the time) Google can use this to broaden the list of sites it crawls. Ditto for the toolbar.
  
  Carr's right that the utility of the search box isn't itself more useful when more people use it. But Google has its fingers in so many pies that the response is disingenuous. Millions of people annotating Google maps data? A liquid market for relevance-based ad placement? A checkout model that allows the company to bill per transaction but bucket those transactions to pay less? The list goes on.
  reply
• 

  Commodity Trading Accounts

  8 months ago

  “nothing to do with the network effect.” are you kidding???
  reply