Finweek English Edition - - COVERSTORY -

THE LAW states the value of a telecom­mu­ni­ca­tions net­work is pro­por­tional to the square of the num­ber of con­nected users of the sys­tem. Met­calfe’s law was orig­i­nally pre­sented (circa 1980) not in terms of users but rather of “com­pat­i­ble com­mu­ni­cat­ing de­vices”. For ex­am­ple, fax ma­chines, tele­phones, etc. Only re­cently, with the launch of the In­ter­net, did that law carry over to users and net­works, as its orig­i­nal in­tent was to de­scribe Eth­er­net buys and con­nec­tions. The law is also very much re­lated to eco­nom­ics and busi­ness man­age­ment, es­pe­cially with com­pet­i­tive com­pa­nies look­ing to merge with one an­other.



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