With more sectors showing increasing returns, we are in need of modified concepts, models, and strategies for management in today`s digital economy. In chapter 2, this study incorporates network externality factors into marketing analysis m the digital economy. Total network size, local network size, and network strength are introduced and I found three network externality factors have different effects on the users` future usage intention for the four Internet services, In chapter 3, I developed a new diffusion model that incorporates the indirect network externality. New model incorporates the two-way interactions in forecasting the diffusion of hardware products based on a simple but realistic assumption.