Measure of Network Effect on Social Media Platforms

Galani Serban-Vladimir () and Anagnoste Sorin ()
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Galani Serban-Vladimir: Bucharest University of Economic Studies, Bucharest, Romania
Anagnoste Sorin: Bucharest University of Economic Studies, Bucharest, Romania

Proceedings of the International Conference on Business Excellence, 2024, vol. 18, issue 1, 3759-3773

Abstract: Social media platform dramatically changed the world in the last 2 decades. From limited communication possibilities, the individuals found themselves in the posture of connecting with others at only few clicks distance. Those platforms rely on large networks of people and their operators benefit from their effect. The paper examines how network effects impact the financial performance of social media organizations, analyses the strength of these effects on various platforms, and suggests a methodology for calculating the money generated by each user. This comprehensive method seeks to analyze the correlation between user base expansion and income production, providing valuable insights into the strategic importance of network effects in the digital economy.

Keywords: network effect; key financial indicators; social networks; value creation (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:poicbe:v:18:y:2024:i:1:p:3759-3773:n:1050

DOI: 10.2478/picbe-2024-0306

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