Stratechery by Ben Thompson

In a response to a critique of Aggregation Theory, Ben Thompson wrote “And sure, at some point the Aggregator may integrate backwards into distribution or supply, but the foundation of their power comes from aggregating demand, something that was not possible before the Internet.” I agree that these companies’ power comes from aggregating demand, b... See more

What followed was probably my first clear articulation of Aggregation Theory, albeit without the name. The point about effectively infinite competition, though, is a critical one. Neither reach nor timeliness were differentiators, but rather commodities; the companies that dominated on the Internet were those — Google and Facebook in particular — t... See more

Ben Thompson described this phenomenon in his signature aggregation theory. Pre-internet, you captured profits by controlling supply. Now, post-internet, you capture profits by aggregating demand.