Several key points of internet economy

The internet economy has made a lot of traditional economists and management scholars understand that, from the traditional logic, an enterprise should be to provide products and services to obtain income, and to make profits; but internet companies ' products and services often offer free services, sometimes even to pay (when it comes to the show, we're going to think about the recent popular taxi software). But the weirdest thing is that many internet companies (Tencent, 360, etc.), which are under the banner of free service, are still able to make a full pot. Is the internet really so magical?

It's really hard to understand what these Internet companies do if they are in a traditional, fixed way of thinking. But if you understand the words I'm talking about today, I guess you'll get it. In fact, these words are not a new word, almost all of these 10 years are often spoken, I am just helping everyone to explain the logic of this.

The first thing to say is the "attention economy", and sometimes we often use "eyeball economy" to describe the Internet. Is any successful internet company, first of all to be able to attract "eyeball", only the more people pay attention to and use your products and services, is the key to the success of an internet company. No one to use, no good products are white blind. It is this logic that allows many internet companies to put their own basic products and services to the user at the outset free of charge.

So, we look whether it is to provide news Sina, or provide search Baidu, provide instant Messaging QQ, provide network security services 360, almost to users are free. Only in this way can we ensure that they quickly have a huge user.

The second word to say is "lock". Once we get used to using a company's products and services, for most people, stopping or moving to another service provider means cost. It's easy for that company to "lock in" the user, or we'll be relying and stickiness on the company's products. For internet companies, with "attention" and "lock-in", then success is not far away.

The third word is "network effect", that is, the value of our use of a product and service, the greater the value to each of us as the people we use around me. For example, if your friends around you do not use QQ, in fact, QQ is not valuable to you, but if you are around the use of QQ, you do not have to, it will be very inconvenient, and, the use of more people, the greater the value for everyone. The term network effect, in fact, can explain why some internet companies, particularly easy to form a monopolistic market size (of course, this monopoly is a natural monopoly).

If after these three words, we analyze the common Internet company's business model, it is more easy to understand. Because of the large number of users, internet companies can sell ads to companies, such as:

Baidu, Sina and so on in the past is mainly rely on the so-called advertising to obtain income;

Internet companies can not sell ads, you can sell virtual props and equipment Ah, this is the model of online games;

Of course, as long as there are a large number of users, do not sell ads to enterprises, not to sell virtual props to individuals, it can sell entity goods, this is what we often say e-commerce.

Therefore, whether selling ads or virtual props or selling e-commerce, essentially speaking, and there is no inevitable difference, and whether it can attract users, and cultivate the habits of users, is the most important. This is not difficult to understand why Baidu, Tencent, Alibaba, three from different starting point of the Internet companies, and now increasingly become a rival rival. Don't worry, bat will have more lively look, move a Mazar waiting to see, hey.