The Research Of Interconnection Between Platforms Of Two-Sided Markets Of Mobile Instant Messaging Industry

Two-sided markets theory is hot spot in the field of Industrial Economics, and compatibility of competing firms is an important topic of Two-sided markets theory. Many scholars used this theory to do the research of compatibility of many industries. With the development of internet, the compatibility of instant messaging industry attracted many people. In the desktop instant messaging business, the competing firms have made some of their services compatible. But the dominant instant messaging firms didn't participate in. Recently, there has been significant progress in China's mobile instant messaging business. With the advent of Fetion QQ and Tianyi LIVE, the mobile instant messaging firms made their services incomplete compatible, and the leader firm—Tencent QQ participated in, which was very rare. So the author tried to answer these following questions. If this incomplete compatibility is more appropriate than complete compatibility, and if mobile instant messaging industry should achieve full compatibility?First of all, according to the two-sided markets theory and the specific circumstances of mobile instant messaging business, two-sided markets theory can be used to research the mobile instant messaging business, and it has the feature of positive externalities. Two-sided markets involve two groups of agents who interact via platforms. In mobile instant messaging, the two groups are the chat customers and the content providers. Secondly, the author analyzed the key factors which influence the compatibility of mobile instant messaging, including consumer switching costs, platform pricing, consumer multihoming behavior, network externalities and access fees. Thus author decided to add self-group externalities, cross-group externalities, access fees and compatibility parameters into the model. Thirdly, the author revised the standard Hotelling model of industrial organization theory, including adding the self-group externalities and compatibility parameters. Then the author used the revised model to analyze the differences of pricing, profits, consumer welfare and social welfare under different compatible conditions. Finally, the conclusion was achieved that from the points of consumers, platforms and the social welfare, the platforms should choose complete compatibility. The author also made the following suggestions: (1) The platforms should adopt a more clear and transparent mechanism for access fees; (2) Telecommunications operators should be actively involved in the development of mobile instant messaging system; (3) Mobile instant messaging firms should pay more attention to matching efficiency and product differentiation; (4) The followers should try their best to improve competitiveness to achieve complete compatibility.