what is the network effect 
the network effect is a phenomenon whereby increased numbers of people or participants improve the value of a good or service the internet is an example of the network effect initially there were few users on the internet since it was of little value to anyone outside of the military and some research scientists however as more users gained access to the internet they produced more content information and services the development and improvement of websites attracted more users to connect and do business with each other as the internet experienced increases in traffic it offered more value leading to a network effect investopedia yurle villegas