When talking about business or economics, the term network effect is described as the result or effect of a good such as the Iphone or a service such as Facebook has on the value of that product or service on other people. In other words how that product betters the life and kind of makes them reliant in a way of that good or service.
I just had to get a Iphone when they first came out and was super excited about it and now Im so reliant on it because so many of my friends have one as well and we stay in such close contact with one another with them that we might go crazy without it. The same applies to Facebook. The more people that join the more connections and happenings I get connected to. Its almost a fade in a way that you get sucked in to through popularity of the masses. The more people that join the more valuable this commodity becomes to me.
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