Which of the following statements illustrates the network effects that portals are subject to?
A)Specialized vertical market portals attract only a small percentage of the audience, while a few large megaportals garner most of the market.
B)The value of the portal to advertisers and consumers increases geometrically as reach increases.
C)The greater the amount of content provided by a portal, the greater its value to the community.
D)The greater number of portals available, the greater the potential audience for each.

Question

Quizplus · Accepted Answer

This statement illustrates the network effects that portals are subject to, where the value of the portal to advertisers and consumers increases geometrically as the reach (number of users) increases. This is an example of direct network effects, where the value of the network increases as more users join. The other statements do not directly illustrate network effects. A illustrates market concentration, C illustrates content quality, and D illustrates market fragmentation.

Which of the Following Statements Illustrates the Network Effects That