Source: 'The State of Competition and Dynamism' (Shambaugh et al., 2018)

Evaluating Digital Platform Potential

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?

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