Economics Dictionary of Arguments

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Jeff Jarvis on Costs - Dictionary of Arguments

I 56 (page numbers from the German edition)
Costs/Internet/Networks/Tom Evslin/Jarvis: a decisive step in the direction of the Internet boom has been taken by AT&T's introduction of a flat rate.
I 57 (page numbers from the German edition)
Since then, networks no longer charge users as much as the market could cope with. They charge as little as they can bear themselves. In this way, they increase their growth and value for everyone who is part of their network. Networks grow as more websites want to be among them than among the greedier competitors. However, ad networks need a critical mass of audiences.
Problem/Evslin: if the operator is too profitable, the competition will try to undercut its prices in order to compete for market share.
Solution: you have to keep the company at or near the break-even point. This makes it impossible for competitors to underbid you without making losses themselves.
Networks/Evslin: you should skim a minimum of value from the network in order to reach the maximum of size and value and give the members a profit margin. This keeps costs and profit margins low in order to block competitors.

Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments
The note [Author1]Vs[Author2] or [Author]Vs[term] is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.

Jarvis I
Jeff Jarvis
What Would Google Do?: Reverse-Engineering the Fastest Growing Company in the History of the World New York 2011

Jarvis II
Jeff Jarvis
Public Parts: How Sharing in the Digital Age Improves the Way We Work and Live New York 2011

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