A System Dynamics Model Approach for the Analysis of the Network Effect of the Internet Portal Sites

시스템 다이내믹스 모델을 이용한 인터넷 포털 사이트의 네트워크 효과 분석

Internet portal sites have served customers for more than a decade in Korea. There have been several such sites have survived, succeeded and led the internet industry. What is the source of their competitiveness? We assumed that the network effect, which can vary dynamically, is an important factor; so we tried to build and analyze a system dynamics model on portal sites that represent their advertising business model. This model includes not only the network effect, but also customer's' expectations of the quality of portal sites, which also varies dynamically. As a result of our research, we can state that the network effect is important to stabilize and increase portal sites' quality, market share, income and cash flow. And we know that investment at a level above that which is merely required is necessary to preserve and stabilize their business.