Two-sided Internet Platforms: A Business Model Lifecycle Perspective

Multi-sided platforms bring together two or more distinct but interdependent groups of
customers, normally described as B2B and B2C. Two-sided platforms have proliferated
rapidly with the Internet and this has led to the development of new business models to
monetize innovative value propositions in online markets. This paper puts forward a
model of the evolution of the marketing strategies and business models of two-sided
Internet businesses. In this model, Internet intermediaries are visualized as resource
integrators, involving consumers and business partners in a process of co-creation of
value—an integrated, two-sided business model. An analysis of five early stage Internet
ventures reveals that the business models of these Internet ventures show a clear pattern of evolution from inception to maturity, from B2C towards B2B, and ultimately to an integrated combination (B2B&C and B2C&B). This is primarily due to a shift in the relative influence of different business stakeholders, identified as change agents in the context of the business modeling of two-sided Internet platforms.