Internet portals' strategic utilization of UCC and Web 2.0 Ecology

Some innovative portals are now utilizing user-created content (UCC) through community-based search (CBS). Surveys observe that most UCC is actually copied from many peripheral nodes. CBS not only changes portals from gateways to destinations on the web, but also directs the flow of contents from satellites into portals, which may further strengthen search traffic monopolization within the portal. Under a search portal's network centrality, we model the underlying economics of UCC production and traffic distribution between a portal and satellites. Our results show that a portal exercises the co-petition strategy by subsidizing traffic to satellites so that satellites return contents subsidization. Managerial and design implications to Web 2.0 sites are derived from our analytical results.