An analyst is comparing two new internet search engines. Search Engine X has 50 employees and reported $10 million in annual revenue, primarily from enterprise clients. Search Engine Y is free for consumers, has only 15 employees, reported $2 million in advertising revenue, but processes 100 times more search queries per day than Search Engine X. Which statement provides the most accurate analysis of the two companies' operational scale?
0
1
Tags
Social Science
Empirical Science
Science
Economics
Economy
Introduction to Microeconomics Course
CORE Econ
Ch.7 The firm and its customers - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Microeconomics @ CORE Econ
Analysis in Bloom's Taxonomy
Cognitive Psychology
Psychology
Related
Source: 'The State of Competition and Dynamism' (Shambaugh et al., 2018)
Evaluating Digital Platform Potential
Assessing the Scale of a 'Free' Digital Service
An investment analyst concludes that a new, free-to-use photo-sharing app with 50 million active monthly users but no revenue is a less significant market player than a traditional photo-printing service with $20 million in annual revenue. This conclusion is sound because revenue is the most reliable indicator of a company's scale and market influence.
17th-Century Fishing Guild Debate
Critiquing a Venture Capitalist's Analysis
For each digital business model listed, match it with the most direct and effective usage-based metric for evaluating its operational scale.
A market regulator is assessing the operational scale of a new, free-to-use social media app to understand its potential market influence. Which of the following metrics would be the LEAST reliable indicator of the app's scale?
Regulatory Assessment of a Digital Platform
Merger Assessment in the Digital Economy