Market bundling strategies in the horizontal portal industry
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.
|Date of creation:||15 Oct 2002|
|Contact details of provider:|| Postal: IESE Business School, Av Pearson 21, 08034 Barcelona, SPAIN|
Web page: http://www.iese.edu/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mackie-Mason, J.K. & Varian, H.R., 1994.
"Economic FACs about the Internet,"
94-05, Michigan - Center for Research on Economic & Social Theory.
- Michael Smith & Erik Brynjolfsson, 1999.
"Frictionless Commerce? A Comparison of Internet and Conventional Retailers,"
Computing in Economics and Finance 1999
1022, Society for Computational Economics.
- Erik Brynjolfsson & Michael D. Smith, 2000. "Frictionless Commerce? A Comparison of Internet and Conventional Retailers," Management Science, INFORMS, vol. 46(4), pages 563-585, April.
- Salinger, Michael A, 1995. "A Graphical Analysis of Bundling," The Journal of Business, University of Chicago Press, vol. 68(1), pages 85-98, January.
- Yannis Bakos & Erik Brynjolfsson, 1999.
"Bundling Information Goods: Pricing, Profits, and Efficiency,"
INFORMS, vol. 45(12), pages 1613-1630, December.
- Yannis Bakos & Erik Brynjolfsson, 1997. "Bundling Information Goods: Pricing, Profits and Efficiency," Working Paper Series 199, MIT Center for Coordination Science.
- Schmalensee, Richard, 1984. "Gaussian Demand and Commodity Bundling," The Journal of Business, University of Chicago Press, vol. 57(1), pages 211-230, January.
- Cassiman, Bruno & Sieber, Sandra, 2002. "Impact of the Internet on market structure, The," IESE Research Papers D/467, IESE Business School.
- Joseph Farrell & Hunter K. Monroe & Garth Saloner, 1998. "The Vertical Organization of Industry: Systems Competition versus Component Competition," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(2), pages 143-182, 06.
When requesting a correction, please mention this item's handle: RePEc:ebg:iesewp:d-0480. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Noelia Romero)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.