ABSTRACT
The popularization of the internet in the 1990s enabled the use of communication technology to create new platforms in multi-sided markets. Marketplaces such as eBay and Amazon enabled buyers and sellers to interact in a store with an endless supply. Google enabled the interaction of content creators, eyeballs and advertisers, sorting the world’s information. Facebook united the world in a social network for individuals to interact with each other and with advertisers. Airbnb enabled hosts and guests to meet each other and share accommodation assets. Digitalization empowered new direct and indirect network effects, and also new algorithmic network effects. The more data about the interacting groups is captured by the platform, the better the machine learning algorithms can automate the interactions between them. Searches of information and services such as accommodation, as well as advertisement, can be personalized. As a result, digital platforms are growing increasingly powerful, building solid positions in each digital market.
