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Blog Past: Two-Sided Markets

July 26th, 2009 · 1 Comment

This is a series from November 2006:

Understanding two-sided markets is especially critical for entrepreneurs and managers in the Internet and mobile space. One of the dominant models that has emerged over the years is that of giving away services for free. While this has been around for some time, the Internet provides scale which would never otherwise have been possible previously. The combination of “software engines” and contextual advertising has made Google a powerhouse on the Internet. The next big opportunity is on the mobile. What will be the equivalent on the mobile Internet – where screen-size limitations and user impatience could potentially limit advertising. I can imagine mobile content (ringtones, wallpapers and games) being offered for free at a not-too-distant future – subsidised by advertising. This can shift power from mobile operators in India who keep a lion’s share of the end-user charges to platform providers who can build direct-to-consumer relationships and enable advertisers to connect with this audience.

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