04 January 2006

Google 'Ecosystem' and Wall Street

This article caught my attention ... in particular David Ng's use of "ecosystem". He seems to refer to external (to Google) services, but might the notion also apply to the plethora of services Google has recently introduced (which have been reported widely in the media)? Are network externalities a factor here, or are there other economic phenomena at work?

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1 comment:

KuangChiu Huang said...

Although network externality is powerful, I suspect whether Google can expand the externality from its capable search engine into affiliated services. The limitation of indirect network effect could be one of the reasons to explain why Google spent $ 1 billion for AOL’s 5% stake. I believe the successful business model of Google search is the main driving force for the soaring stock price. It, however, could be threatened by losing of network neutrality and emerging of non-algorithm search.