Key Concepts: A New Economics?, Networks, Epidemics and Marketing Tipping

Amazon.com & E*TRADE—New Economy Business Models

Explore the services offered by the selected "new economy" businesses:Amazon.com and E*TRADE.

• Describe how new technology such as the Internet enables "new economy" businesses to emerge and challenge the existing businesses (e.g. Amazon.com vs. Borders and E*TRADE vs. Merrill Lynch).
• Which "new economy" attributes convinced a large number of investors that "new economy" businesses would generate a higher level of profit than traditional or "old economy" businesses?
• Visit ebay.com. Explain why eBay enjoys the benefits of positive network feedback or externalities.