Zhang et al. exploited data on Facebook and Tencent to validate Metcalfe＇s law, which states that the aggregate value of a communications network is proportional to the square of the number of users. This note points...Zhang et al. exploited data on Facebook and Tencent to validate Metcalfe＇s law, which states that the aggregate value of a communications network is proportional to the square of the number of users. This note points out that the value of a social network may be driven not only by its size, but also by increases in the variety and quality of the services offered. I therefore extend Zhang et al.＇s approach by explicitly controlling for changes in network quality over time. For the case of Tencent, I also filter out revenues and costs that are unrelated to Tencent＇s core （social network） services. I find that these two extensions only strengthen Zhang et al.＇s conclusions： Metcalfe＇s law now outperforms the other laws even more clearlv.展开更多
文摘Zhang et al. exploited data on Facebook and Tencent to validate Metcalfe＇s law, which states that the aggregate value of a communications network is proportional to the square of the number of users. This note points out that the value of a social network may be driven not only by its size, but also by increases in the variety and quality of the services offered. I therefore extend Zhang et al.＇s approach by explicitly controlling for changes in network quality over time. For the case of Tencent, I also filter out revenues and costs that are unrelated to Tencent＇s core （social network） services. I find that these two extensions only strengthen Zhang et al.＇s conclusions： Metcalfe＇s law now outperforms the other laws even more clearlv.
