Internet Websites Customers - Essay Example

Internet users usually have access to numerous website free of charge. This makes them shift from one site to another. Though these numerous websites are cost free for any internet user, in the real sense they distract the concentration and attention of internet user as they try to advertise products of their different customer (White and Kamal, 2012).This call for attention from internet user serves as the price charged by these sites. Each of these numerous websites transforms attention of internet users into revenue at a different rate from the other. This difference in each website ability to profitably transfer information into revenue to the internet user is particularly crucial in the fact that people surf the web (White and Kamal, 2012). Each website an internet user visit during his or her browsing session usually facilitate to the achievement of some objectives that are beyond mere identification of independent visitors to the site (White and Kamal, 2012).This similarity amongst all websites makes it easy for any person to note their relations to each other. When different website are complementary like search engine and content website, then internet users willingness to visit the combination of these sites depend on the rate of advertisement of each site (White and Kamal, 2012).This means that the number of visitors each site get per a specified period depends on its advertisement policy and frequency. So each website should keenly develop its advertisement strategies in an effective manner to ensure it attract higher number of visitors. In scenarios where complementary sites act independently, then their total distraction from their advertising becomes too high thus discouraging many internet users from visiting these sites. This makes it hard for these sites to maximize their total profits from advertisements. Secondly when complementary sites decide to operate independently, they end up allocating inefficient demands to attract internet user’s attention. When there are two competing companies with constant marginal cost that provides customers with perfectly complementary components, then overall business gains can be maximized only when one of the companies decides to lower it price to equal it marginal cost and the other firm freely adopt optimal price (White and Kamal, 2012).However, this fact does not apply to website owners when they opt to distract internet user from using their site in their attempt to advertise their sponsors’ product. This means that forcing one of the complementary sites not to advertise does not necessarily maximize total profits of the complementary sites. In fact, it can lead to decline in total profits of the two complementary sites due to lack of cooperation between them. While increased competition from a multiple complementary sites solves the problem of double marginalization, the competition, also leads to increased problem of mis'-marginalization. Effect of differentiation among content website To achieve greater efficiency, when the market is in equilibrium and all firms tend to behave non-cooperatively, and content website has relatively inefficient advertising technologies, then it is socially desirable that the website owners increase the number of content websites than the internet users induces to enter (White and Kamal, 2012). This is because an increase in the number of content websites shifts advertising away from the content websites to the more efficient search engine advertising technology. Effect of competition When two or more sellers who deals with complementary products engages in double marginalization, then to ensure that they all maximize profits, then they need to increase competition in all markets (White and Kamal, 2012).This is because if the market of one firm becomes perfectly competitive, then the other complementary firm can successfully charge a price that implements the optimum outcome of the industry as a whole. Otherwise if, a set of complementary websites, whose revenue comes exclusively from advertising, engage in both double and mis'-marginalization, then there rises a scenario of trade off resulting to decrease in profits of both firms. Findings Mis'-marginalization plays a real crucial role in determining the optimal configuration for the overall industry (White and Kamal, 2012).For example, traditionally consumers were unconcerned with their amount of money that went to their respective producers, but nowadays consumers are extremely keen on what they spend in their purchases. So with advertising, a unit of consumer attention translates at a variable rate to revenue for the website. This implies that in modern days when content website advertising technology is sufficiently efficient for low levels of users, then any move made by internet owners to perfect competition between two or more content websites that lead to alleviation of double marginalization problem, leads to increased problem of mis'-marginalization. Secondly, in case there are no barriers to entry of content website, then the search engine and the internet surfers’ interest is opposed to one another (White and Kamal, 2012). This implies that in case a single advertiser e.g. search engine and multiple advertisers such as content websites offers internet surfers access to content in a complementary way, then in case content website owners opt to keenly increased their competition in such a manner that they cause less distraction to internet surfers, and in response the search engine increases their competition causing much distraction to surfers at a rate that allows total demand to expand, then this competition hugely benefits internet users. On the other hand if the two complementary internet owners opt to hold their demand level fixed, then increased differentiation from either search engine or content website is beneficial to all users. This is because in case of a fixed demand; any increase in differentiation from any internet provider widens the gap between users who are infra-marginal and those that are marginal. Opinion When site are developing their advertising technologies, they must intensively plan before they opt to settle on using a technology. This will enable them to efficiently allocate the demands they frequently keep making to the internet surfers, and as a result, they will be in a better position to hugely improve up their equilibrium level of total profits. Secondly when two sites are offering perfectly complementary products or components, then the owners should lay down proper strategies to ensure their site has proper coordination and cooperation. This will ensure that both sites are in a position to address the problem of double marginalization and mis'-marginalization in the market thus allowing them to maximize their profits. Works Cited White, Alexander, and Kamal Jain. The Attention Economy of Search and Web Advertisement. Singhua University School of Economics and Management. 2012. Print. Read More

 

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