This review was first published by Booklist on May 18, 2016.
When we think about companies like Facebook, Google, Apple, Amazon, YouTube, and Uber, we tend to focus on the technology they innovate and how they’re changing our daily lives. But these platform businesses are some of the largest in the world today, commanding huge swaths of the modern economy. They’ve attained a scale long considered impossible by more traditional business models. Modern Monopolies analyzes platform businesses from the perspective of economics. Platform companies haven’t just beaten more traditional businesses; they’ve changed the nature of business itself, created whole new markets, and redefined what constitutes value. The authors analyze the path to success for platform companies and explore several ways that these businesses can fail. They display a strong grasp of the theoretical principles at play here but also evince a down-to-earth, nuanced, and critical view of how these companies function. Of particular importance, they suggest a fundamental reanalysis of the assumed value of “network effects.” This book is satisfying and timely, a valuable contribution to our understanding of modern business.