Define networks, marketplaces, and platforms and discuss their differences.

 A digital firm can therefore opt for one of the 3 basic models – Network, Marketplace and Platform. The basic difference between them is the nature of interactions between the firm and its consumers, and between its consumers.

-Network is the simplest model, with value determined by the broadcast value. Telecommunication network, Skype, Social networks like FB are the simplest form of network, and are typically homogeneous, operate in a NXN mesh, are bidirectional.

-Marketplace is the next evolution of this model. This digital models are heterogeneous, operate in a one-to-many mode, are bidirectional, and provide a foundation for multiple businesses to come together and operate.

-Platform is, however, the highest form of evolution of digital business models. Its build on platform model – but create marketplace on marketplace: sub-groups of users coming together, homogeneously and/or heterogeneously, to create their own marketplaces. It requires an Open Platform, so that user community can extend the original platform to new functionalities and add new capabilities.

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