Digital Economic Practices

Understanding the digital economy requires examining actual practices that constitute digital economic activity. This topic explores three major types: search and advertising, social media, and disintermediation platforms.

Google's success derives from reading the Web (PageRank algorithm) and analyzing user behavior for targeted advertising. Key elements:

• PageRank treats the Web like an academic citation network
• Personalization identifies correlations between user groups
• Automated keyword auctions monetize search
• Generated over $26B in Q1 2018 (85% of income)

Social media platforms monetize human sociality through:

• Facebook: 2B+ users, 98% revenue from advertising
• WeChat: Integrated financial services in China
• Data collection on demographics, behaviors, connections
• Balance between advertiser demands and user experience

Platforms replace traditional intermediaries with digital controls:

• Uber: Rating systems, algorithmic matching, automated payment
• Airbnb: Trust mechanisms, insurance, dispute resolution
• Blockchain: Distributed trust without central platforms