Market bundling strategies in the horizontal portal industry

Sandra Sieber () and Josep Valor ()
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Sandra Sieber: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Josep Valor: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN

No D/480, IESE Research Papers from IESE Business School

Abstract: The arrival of the Internet offers opportunities for both incremental efficiency gains and complete industry redefinition, presenting new value propositions and hence leading to the emergence of new businesses and industries. One particular case is that of the horizontal portal industry, such portals being consistently the most visited sites on the Web. Nevertheless, despite ongoing market concentration, overall profitability remains low. In this paper we contend that, although the industry has great potential for value creation, value appropriation in such information-based businesses remains problematic. The only way to achieve it is through cross-market bundling; that is, portals selling their products packaged with Internet access and proprietary content through system competition. We support our claims with theoretical argument and empirical evidence, analyzing the information distribution value chain in its entirety.

Keywords: Portals; information goods; Internet advertising; Internet service providers; content provider (search for similar items in EconPapers)
Pages: 17 pages
Date: 2002-10-15
New Economics Papers: this item is included in nep-com, nep-ind and nep-net
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:iesewp:d-0480

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