1. Internet Economics Traditional Reach and Richness tradeoff ? Flexibility of the web: Retial, Advertising, Customer Service etc. The Long Tail – Half google searches are unique – Half amazon orders are out of the top 130,000 books

2. Cost Structures Fixed versus Variable Costs Fixed costs are sunk – Not considered for future decisions Variable costs are minimal – zero – zero distribution costs – Zero copy costs – Perfect copes Versioning and product differentiation

3. Installed Base Lock-in Switching Costs Life-time value of the customer

4. Network Effects Increasing returns; Metcalfe’s Law Learning Curve issues, average costs First mover advantage Tipping point “Winner takes all”

5. Standards Proprietary Standards Open Standards, single company Open Standards, consortium WINTEL TCP/IP QWERTY Railway Gauge