Ben Thompson’s “Stratechery”
Ben Thompson is the author of Stratechery, a popular newsletter that “provides analysis of the strategy and business side of technology and media.” Thompson, who has an MBA, is a former tech industry worker who has spent time at various tech firms, including Apple and Microsoft. He is a smart and thoughtful guy who has interesting and insightful things to say about tech strategy, which is an endlessly interesting topic. I appreciate his work and admire his effort to set up his own shop and do his own thing.
However, Thompson has more recently begun to pronounce and analyze in the field of tech antitrust, and here he is on less solid ground. I appreciate that deep industry expertise is important in his area, especially, say, when designing remedies that make sense. Nonetheless, I’d say Thompson’s readers are at risk of being misled if they rely too much on what he has to say about tech antitrust. For, as we shall see, his analysis relies too much on an idiosyncratic “digital markets are fundamentally different” thesis that really doesn’t hold up too well. Stated simply, I’d say he’s inducing his readers to drink too much of his “aggregation theory” Kool-Aid, as opposed to encouraging them to think more broadly or read more deeply to understand a slightly messier reality than he presents.
Take Thompson’s recent analysis of the United States v. Google case. According to Thompson, the Google case needs be understood primarily through what he calls aggregation theory, which is something of a specialized version of what economists call a two-sided markets theory. His theory asserts that 1) the quality of the user experience, rather than control over distribution, is what determines the winners in digital markets; and 2) a lead based on quality is self-reenforcing, because either more suppliers are attracted or the winner, with more customers, gets more feedback on what makes for a better product. (For those with a background in economics, Thompson’s aggregation theory resembles a mixture of a two-sided market theory with some positive feedback loop stuff thrown in.) Thompson says that “aggregators” (or more technically…