This week’s posters found many examples of network externalities and their effects on the spread of technology.  Blogger w8143 brings up the examples of iPods.  Their large market share makes it more likely that a consumer looking for an mp3 player will know of and trust the brand.  The considerable user base also makes third-party iPod-compatible products more appealing to producers, another network effect which reinforces Apple’s strength in this area.  This same idea applies to newly released hardware and software in the IT industry. An article posted by BoZo explains how large numbers of initial users flocking to fledgling products increases their interoperability and the efficiency of tech support.

Many internet-based technologies gain value from increasing numbers of users.  FON is a company mentioned by adrian which offers free wireless access to users who agree to share access with other FON members. The base value of the service (FON provides free wireless access points), is enhanced as more people join. VoIP technologies, such as Skype and the Gizmo Project; social network sites, such as Facebook and MySpace; and P2P services, like KaZaa and Limewire, all clearly also become more valuable as their user bases grow.  All such products, used to connect people in different ways, are generally useful in direct proportion to the number of people they are able to connect.

Network externalities also help to spread new ideas and trends. Kalora posted two articles (2) about alternative energy technologies. The lack of wide acceptance for these technologies makes it hard to roll them out on a large scale. As the number of users grow, increased supply and availability becomes a beneficial network effect.  A post by dijkstra discusses an article on campaign finance in the context of network externalities. Contributors to a political campaign make a candidate more viable, which in turn draws more contributors.