The Internet Economy

We are living in an era of bundling. The big five consumer tech companies — Google, Apple, Facebook, Amazon, and Microsoft — have moved far beyond their original product lines into all sorts of hardware, software, and services that overlap and compete with one another. But their revenues and profits still depend heavily on external technologies that are outside of their control. One way to visualize these external dependencies is to consider the path of a typical internet session, from the user to some revenue-generating action, and then (in some cases) back again to the user:

When evaluating an internet company’s strategic position (the defensibility of its profit moat), you need to consider: 1) how the company generates revenue and profits, 2) the loop in its entirety, not just the layers in which the company has products.

Craigslist, Wikipedia, and the Abundance Economy

You’ve heard it before. Maybe you’ve even said it. “There’s no such thing as a free lunch.”
“You can’t get something for nothing.”

“Somebody has to pay.”

People recite these sayings with confidence, as though they were quoting Newton’s Laws of Motion.
But history has shown: you often can get something for basically nothing.

And even when somebody has to pay, that somebody doesn’t have to be you, and the amount doesn’t have to be very much at all.

In some cases, the benefits so vastly outweigh the costs that it is — for all practical intents and purposes — a free lunch.

How we eradicated Polio from the face of the Earth