SOLVING THE ONLINE PLATFORM PUZZLE

By CHRISTIAN HILDEBRANDT and RENÉ ARNOLD

The internet can reduce information and transaction costs to almost zero – so it lends itself well to creating platform business models that act as intermediaries to match two or more users or groups quickly and independently of their location. It is not surprising that two of the earliest actors in the commercialisation phase of the internet were Amazon and eBay – and both companies are still thriving today.
With consumers spending more time online, advertising expenditure was bound to quickly follow eyeballs. Google, Facebook and others build on the insights they are able to gather about consumers, but also about advertising effectiveness, to create highly profitable platforms for advertisers. Recently, new competitors such as Snapchat and WeChat, which better understand how to capture the attention of consumers on mobile devices, are catching up.