Monday, May 12, 2008

User supplied content and network effects

We discuss the value of user-generated content. An early example was Amazon.com, which beat a better established competitor, Barnes and Noble, by encouraging people to submit reviews of books.

Wikipedia and Craigslist are two other well known examples. The Wikipedia Foundation, which runs one of the most visited sites on the Web, had only 14 employees as of March 2008. Craigslist had only 23 employees in October 2006 yet it was one of the ten most visited Web sites, as we see here:



This list may be exaggerated -- other companies like the BBC and Disney have diverse interests going far beyond their Web sites and revenue at Craigslist is far below the other companies on the list -- but it makes the point that providing a uniform place for users to post their content is sufficient to build a very valuable service.

Ebird provides another example. Ebird is not commercial -- it is a citizen science site, operated by the Audubon Society and Cornell University, where bird watchers can submit their observations. Ebird gives individual bird watchers a secure, handy place to store their observations, and the collected data may be analyzed for scientific purposes, as we see in this map showing the US Osprey population:



Services which, like these, grow in value as the number of users (content contributors) grow, are said to enjoy network effects.

Can you give examples of other services that rely on users for content and enjoy network effects? Can you think of such a service that might be of value to students on our campus? To students world wide?