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In defence of newspapers and serendipity
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!
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.
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.
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.