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Defining Aggregators

Defining Aggregators

my notes ( ? )

Aggregation Theory describes how platforms (i.e. aggregators) come to dominate the industries in which they compete in a systematic and predictable way.... how value has shifted away from companies that control the distribution of scarce resources to those that control demand for abundant ones; the purpose of this article is to catalog exactly what the latter look like...
Direct Relationship with Users...
Zero Marginal Costs For Serving Users...
Demand-driven Multi-sided Networks with Decreasing Acquisition Costs...users reap value through discovery and curation, and most aggregators get started by delivering superior discovery... once an aggregator has gained some number of end users, suppliers will come onto the aggregator’s platform on the aggregator’s terms, effectively commoditizing and modularizing themselves... for aggregators, customer acquisition costs decrease over time... enjoy winner-take-all effects...
there are different levels of aggregation based on the aggregator’s relationship to suppliers...Social networks are also Level 3 Aggregators: initial supply is provided by users (who are both users and suppliers); over time... professional content creators add their content to the social network for free...
Super-Aggregators operate multi-sided markets with at least three sides... and have zero marginal costs on all of them. The only two examples are Facebook and Google

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