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Re-Thinking the Network Economy: The True Forces That Drive the Digital Marketplace Hardcover – September 7, 2002


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Product Details

  • Hardcover: 210 pages
  • Publisher: AMACOM; 1st edition (September 7, 2002)
  • Language: English
  • ISBN-10: 0814406491
  • ISBN-13: 978-0814406496
  • Product Dimensions: 9.2 x 6.3 x 0.9 inches
  • Shipping Weight: 1.1 pounds
  • Average Customer Review: 4.4 out of 5 stars  See all reviews (5 customer reviews)
  • Amazon Best Sellers Rank: #1,633,500 in Books (See Top 100 in Books)

Editorial Reviews

Review

"author analyzes such issues....as how companies can use traditional economic concepts to build a foundation for e-business success. -- Customer Relationship Management, September 2002

"is an eye-opener on par with a poke from a sharp stick." -- New Architect, December 2002

"provides an eloquent crash course on Internet advertising... Liebowitz's analysis is useful". -- Yale Global Online

It is the best book to date on the facllacies of the e-commerce craze. -- Economist.com, September 26, 2002

It is the best book to date on the fallacies of the e-commerce craze. -- Economist.com, September 26,2002

Re-Thinking the Network Economy will enlighten investors and managers alike. -- New Architect December 2002

Book Description

"Once upon a time, it was widely thought that Internet commerce could exist apart from traditional business strategy, and that all the known financial models previously relied on could be disregarded.

What has become eminently apparent since the dot-com collapse is that standard economic theories apply to Internet business just as much as they do to any other enterprise. Many dot-coms have failed, but e-commerce isn’t going away, and business leaders need to understand what went wrong in order to dominate in the real new economy. Rethinking the Network Economy examines exactly where, how, and why so many e-commerce firms went wrong, and how, utilizing traditional economic concepts, businesses can build the foundation for success in the future. The book analyzes issues such as:

* How tried-and-true formulas such as network effects, first-mover-wins, and supply-and-demand relate to e-businesses

* Why companies counting on locking in consumers will need to rethink their strategies

* When selling products over the Internet makes sense (and when it doesn’t)

* The dangers of comparing profits of brick-and-mortar firms with Internet firms"


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11 of 11 people found the following review helpful By Patrick on December 10, 2002
Format: Hardcover
"Re-thinking the Network Economy" is an almost deceptively simple book, and that is all to the good for readers. Stan Liebowitz is a highly skilled economist with the ability to make his professional work accessible to interested laymen. Even more interesting to me, as a small businessman, is his intuitive grasp of the entrepreneurial process. His work just has a natural fit to the business world I know, and that is rare among academics, in my experience.
Though some of his humor can make a businessman wince at times, say his: "And of course, once computers are taught to bend the truth, they can replace salesmen of all sorts".

I once observed a young American woman, on a sunny July day in 1974, practicing her college Italian in one those street bazaars in Florence. I think it must have been written in some Intelligent Woman's Guide to Tourism in Cute Mediterranean Countries, that haggling was expected. When the woman responded to a merchant's price quote with a lower offer, he said in perfect English: "Look lady, it's hot, I'm hungry. If you insist on haggling, come back after lunch, but you're going to pay the price I just gave you anyhow."

She bought the dress, but you can find the reason for the merchant's attitude in chapter 4 of this book.

Also, I'm old enough to have been attended to, as a child, by a doctor who made house calls. The reasons why doctors no longer do so are to be found in Liebowitz's explanations of the efficiencies of supermarket shopping: Customers prefer to substitute their uncompensated time for the paid time that delivered groceries would necessarily entail.

So, why did so many smart people lose billions of dollars trying to make viable businesses out of delivering ice cream, chicken, and orange juice?
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11 of 12 people found the following review helpful By Texas50 on September 27, 2002
Format: Hardcover Verified Purchase
From Economic Focus Column:
IN THE late 1990s, firms bet billions of dollars on a theory that turned out to be wrong. It said that in e-commerce, what mattered most was being first. Don't worry about being best, if that slows you down. Sell your product at a loss, give it away, pay people to take it: just build your base of customers fast. Why? Because the weird economics of the Internet-network effects, enhanced economies of scale and lock-in-gave a decisive advantage to first-movers. Now that something approaching 100% of the Internet economy's first-movers have gone bust, this theory looks less plausible. Yet the logic once seemed persuasive. Where exactly did Internet economics go wrong?
A new book by Stan Liebowitz, a professor of economics at the University of Texas at Dallas, and a long-time sceptic of the view that the Internet changes all the rules, gives the most thorough answer so far.
"Re-Thinking the Network Economy" explains what the Internet did change and what it did not, so far as economics is concerned-and it does so in a witty and accessible way. Dr. Liebowitz covers a lot of issues: the exaggerated advantages of Internet retailing over conventional retailing; the false claim that the Internet's lower costs would give Internet firms bigger profits; the inadequacies of the broadcast -television model of advertising revenues; the poorly understood questions of copyright and digital-rights management.

It is the best book to date on the fallacies of the e -commerce craze.
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8 of 9 people found the following review helpful By Craig L. Howe on April 29, 2003
Format: Hardcover
The internet offers incredible opportunities, provided businesses and their advisors do not lose sight of the traditional, fundamental concepts of commerce and economics.
The old rules still apply is the message of author Stan Liebowitz, economist and professor of managerial economics at the University of Texas at Dallas. The Internet creates value by lowering the costs of information transmission. Internet boosters went wrong when they sought to re-write the foundational laws of economics practiced by their bricks-and-mortar competitors. The impact of economies of scale depends on the industry, not on whether the company is internet-based or not.
The author also debunks three other "new" economy myths:
* The first mover advantage. Many internet companies mistakenly rushed to market with inferior products and services - and paid the ultimate price.
* Not everything can be sold on the Internet.
* Customer service still counts.
Liebowitz argues network effects, economies of scale; instant scalability and winner-take-all strategies provide advantages and disadvantages to the consumer. To know which products are likely to succeed on the Internet, the business person must consider:
* Size and bulk of the product relative to its value.
* Immediate gratification factor.
* Perishable items are not meant to be shipped over long distances.
* Some products need to be experienced.
This well-written, often witty book is the first I have come across that seeks to salvage lesions from what is commonly thought of as the "Internet Bubble." The impact of the Internet on our society is not to be trivialized. Information is now available in abundance. Discovering the lessons the media's boosters ignored, Liebowitz argues, if one seeks to learn what the media's "boosters" ignored to their peril, will benefit the reader.
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