Facebook Is A Multisided Platform Essay

2000 Words 8 Pages
MIS3555 - Midterm
(Questions Answered: 1, 2, 6, 7, and 8)

Question #1

Facebook, in my opinion, is a multisided platform for the following reasons:
1) It experiences multisided network effects – the more users there are, the more valuable the platform becomes as a whole. This is especially true from a multisided perspective, because the more users there are the more valuable the platform is for the service suppliers / advertisers. This exponential growth of value based on user base is a prime example of a platform and when that value stretches across at least 2 stakeholders from each side of the platform, then we can be sure that it is a multisided platform.
2) Depends (or at least has depended) on complementors like Zynga to bring unforeseen services to its users. Facebook is a great platform because it has a huge user base today, but to achieve that it (or complementers) needed to create content that lured in users. Since Facebook was a pioneer in its industry (even though previous social media companies existed) the uncertainty of use meant that it needed to allow others to figure out what its users want.
3) Facebook also encourages a triangular platform strategy with feedback from both users and service providers.
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“Keep your friends close and your enemies closer” could be a motto for ecosystems. Having and developing an ecosystem allows the major players to take advantage of both hard and soft power. Being able to influence other key and/or smaller players in the market allows the major player (Facebook in this case) to dictate the path that the industry will take. The Zynga case is a prime example of how Facebook is able to exert hard power by denying access to Zynga to its News Feeds. Being a part of an ecosystem gives Facebook an even greater amount of influence over complementors and competitors who wish to enter this space. Therefore, the ability to exert influence is also a vital benefit of being part of an

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