Delivering on the Promise of Platforms

Source: American Institute for Economic Research
by Michael Munger

“Platforms deliver on promises, and that’s why they exist. Platforms don’t sell anything on their own, but instead sell connections. That’s been true for a long time, but in the past 25 years the picture has come into sharp focus. Imagine it’s 1997. Let’s compare two companies: Walmart and Amazon. Walmart is the largest employer, and largest retailer, in the US. Amazon is … well, in 1997 you’ve never heard of Amazon. It was a bare-bones online book seller, just three years out from its 1994 founding. Whose stock would you buy?” [editor’s note: Actually, I not only had heard of Amazon, but made my first purchase on Amazon (L. Neil Smith’s The Probability Broach!) during their first year in business. At the end of that year, they sent all of their customers a free branded mouse pad – TLK] (03/10/23)