The network effect powers dramatic growth in social websites, but the effect works in reverse too. When the popularity of these sites decline, traffic plunges.
” The network effect is a double-edged sword, Ken Sena, a consumer Internet analyst at Evercore, told me this week.
‘The network effect allowed these companies to grow so fast, but the decline can be just as ferocious,’ Mr. Sena said. ‘If any of them misstep with users, they can leave, and the network effect goes into reverse.’ The textbook case is Myspace, once the most visited social networking site, that is now a shadow of its former self.”
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