[...]WHEN NETWORK EFFECT IS PRESENT, THE VALUE OF A PRODUCT OR SERVICE IS DEPENDENT ON THE NUMBER OF OTHERS USING IT.

 

[...]THE CLASSIC EXAMPLE IS THE TELEPHONE

 

[...] A USER MAY PURCHASE A TELEPHONE WITHOUT INTENDING TO CREATE VALUE FOR OTHER USERS, BUT DOES SO IN ANY CASE. ONLINE SOCIAL NETWORKS WORK IN THE SAME WAY, WITH SITES LIKE TWITTER AND FACEBOOK BECOMING MORE USEFUL AS MORE USERS JOIN.

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