Commoditizing Suppliers
Aggregators, by virtue of owning demand, gain power over suppliers which become modularized and commoditized.
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The Moat Map describes the correlation between the degree of supplier differentiation and the externalization (or internalization) of a company’s network effect.
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Ride-sharing is a winner-take-all market that depends on controlling demand more than it does supply.
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Publishers are trying to threaten Google again, apparently unaware that because of the Internet they have no power: that flows to the platforms that control discovery.
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The Google Squeeze
Google, the real Aggregator, is squeezing OTAs, which acted like Aggregators while depending on Google for demand. It’s easy to say Google is being unfair, but this may be better for consumers.
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Microsoft Ignite, Azure Arc, Additional Insight Announcements
Microsoft’s Ignite keynote and announcements show a company that is back to the same strategy it has always had, just one a new value chain.
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Shopify and the Power of Platforms
It is all but impossible to beat an Aggregator head-on, as Walmart is trying to do with Amazon. The solution instead is to build a platform like Shopify.
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Netflix Loses The Office, Netflix’s Budget Consciousness, Spotify Ends Direct Uploads
It is hard to see *The Office* being a good deal for NBCUniversal, even if Netflix will miss it. Then, Netflix’s budget consciousness is just as likely to be a sign of Netflix power than it is weakness, and more reasons why Spotify isn’t Netflix.
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Airbnb Eliminates Guest Fees, Airbnb’s Initial Advantage, Airbnb’s Delay
Airbnb is eliminating fees for guests, a change that is both overdue and also additional evidence that the company has been moving too slowly to secure its Aggregator position.
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The Problem with “Aggregation Theory”, Demand at Scale, Supplier Power and Value
A response to The Problem with Ben Thompson’s ‘Aggregation Theory’, and why the Internet really is different (this Daily Update is freely accessible)
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Uber Questions Follow-up, Luminary Launches, Luminary’s Broken Rung
More on why giving information to investors often helps companies, then why Luminary, a new service for podcasters, is probably not going to succeed. Building bundles is hard!
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Where Warren’s Wrong Follow-up, Amazon’s Price Parity Provision, The Amazon Marketplace Question
More on Senator Warren’s tech antitrust proposal, why regulatory focus should be on contracts, and why 3rd-parties benefit from Amazon Marketplace.