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Modeling Linking on the Web
An Anonymous Coward writes "Amazon has a much greater market share among online bookstores compared to the greatest market share for offline stores. How is this possible? Because the web changes how people find information. There are millions of links to Amazon on the web, which makes it more likely for people to find Amazon when surfing the web, or when using search engines which typically use link popularity in ranking. This makes it harder for new businesses to compete. Researchers have discovered that across the entire web, links are distributed according to a "power law" which leads to "rich get richer" or "winner's take all" behaviour where a small number of sites get the vast majority of links and traffic. A new study just released by NEC shows that this behaviour varies in different communities, and shows how to predict competition in different areas. For example, you can see how much tougher competition is among booksellers compared to photographers."
Wouldn't this prove that the quest for eyeballs was no more crazy than the quest for a starlet to become a Hollywood star, the quest for a high school quarterback to make it to the NFL, or the quest to win the lottery?
Amazon does a lot to get their name out. So its very reasonable that most people would tend to look towards them for books.
Ask people off the street where they would buy books on the internet... and your bound to get many replies of Amazon or "I don't know".
I suppose by their logic that the only place to be on the web is AOL... but on the street you could get that response as well.
Advertising does pay. Links on the net may lean towards one provider over another, but most of them were bought by one method or not.
One reason the rich get richer is because they are optimist, they are willing to do it now. The best time to start a business is always TODAY... the best time to get your name out there is ALWAYS today.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
This is also called a scale-free network, and the research on it, by Albert-Laszlo Barabasi (currently at Notre Dame U) is in this week's New Scientist. (Apologies, it's not on their site yet - www.newscientist.com) He's applied it to many systems other than the web as well, from viral transmission on the net and human populations to the vulnerability of "hubs" in genetics (a few, like p53) would take out damn near everything due to their pervasiveness and even quantum mechanics.
toeslikefingers.com - because
While this is probably true for the most part, things can change it.
I'm in Ireland and since the euro came in to being I've stopped ordering from the UK or US versions of Amazon, and other retailers for that matter.
With currency and shipping costs they were killing me. I now look for eurozone suppliers.
I'd still love a good Irish online store though, just to save shipping, but the are all crap half assed efforts.
At least my french and german will improve while browsing.
I don't think that competition for photographers is a good example because location plays a big part in choosing a photographer. I know that some photographers travel alot but they are mostly chosen because of their reputation (often in spite of their webpages ;) )Also, the market share of offline stores is lower due to logistics. For example, all offline booksellers must have a location to display the books and a way to get them there. This costs money.
I also think that the "rich-gets-richer" thing is more about economics than about the number of links a site gets. Amazon buys bigger quantities, and ships more quantities which means that the economies of scale are a HUGE factor. I would venture that the number of links will be a trailing indicator of the relative size of a retailer much more than a contributor to this relative size.
To sum up logistics, economies of scale...intro economics anyone?
The power law may be the same as the Pareto distribution, which models the distribution of income in an economy. Economists have observed it experimentally for decades though the theoretical reasons for it have only recently become understood. The underlying mechanism could well amount to the same thing. Some economists might like to take a look at the web link data. There are probably interesting comparisons to be made between link distribution and income distribution.
It's happened over and over again in the economy in the U.S. elsewhere. We're already seeing it happen again fairly rapidly in the U.S. (and probably other places) in a lot of service and utility businesses-- although some of that is a result of deregulation. Online business just speeds the process up.
The big benefit of the public Internet isn't the speed at which the rich get richer-- it's the speed at which something else can come along. The (relatively) low cost of having a presence online, and the speed with which one can establish a satisfying niche, is what made the Internet the "equalizer" in the late '90s. And everyone will still have a good shot at creating a niche and possibly overtaking this year's "big guns" on the Internet, unless a few organizations get enough power to control whether one "free" person can comunicate with other "free" people arbitrarily.
When Google hit the scene, search absolutely sucked so there's was an existing scratch that needed itching and to scratch that itch, all you did was search from a different page.
So the user got a massive reward from a tiny change. But with Amazon, there's not that much pain in the mind of the online consumer. One-click ordering. Recommendations. Reviews. A very usable site by many standards.
But switching from Amazon to another bookstore requires a good amount of hassle... MUCH more effort than switching search engines and offers a much smaller reward than Google offered to frustrated internet searchers.
Google is interesting for another reason also. If you have a high Google rank, you increase your probability of getting linked to. Which will increase your page rank. Ad infinitum.
I love Google, but I wonder sometimes if at the same time it makes it easy to find good sites, it also inherently keeps other good sites down (relative to the high ranked sites).
--Lawrence Lessig for Congress!
The Atlantic has a GREAT article about this effect:
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http://www.theatlantic.com/issues/2002/04/rauch.h
An exerpt:
"Every so often scientists notice a rule or a regularity that makes no particular sense on its face but seems to hold true nonetheless. One such is a curiosity called Zipf's Law. George Kingsley Zipf was a Harvard linguist who in the 1930s noticed that the distribution of words adhered to a regular statistical pattern. The most common word in English--"the"--appears roughly twice as often in ordinary usage as the second most common word, three times as often as the third most common, ten times as often as the tenth most common, and so on. As an afterthought, Zipf also observed that cities' sizes followed the same sort of pattern, which became known as a Zipf distribution. Oversimplifying a bit, if you rank cities by population, you find that City No. 10 will have roughly a tenth as many residents as City No. 1, City No. 100 a hundredth as many, and so forth. (Actually the relationship isn't quite that clean, but mathematically it is strong nonetheless.) Subsequent observers later noticed that this same Zipfian relationship between size and rank applies to many things: for instance, corporations and firms in a modern economy are Zipf-distributed."
It's one of the best articles I've read in a long time, demonstrating how they've managed to model not only extinct populations accurately (who knows how much after-the-fact tweaking went on, but...) but race riots and honesty in social groups.
Add to that, I spent a good fifteen minutes trying to find it again, so someone had better read it. It's just under 10,000 words.
PS - I strongly doubt it'll get slashed, but if it does, here is the Google cached copy.
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Limekiller