ABSTRACT: This paper develops a dynamic platform model to investigate the consequences generated by the presence of direct and indirect network effects on the innovation's spreading process and the platform's optimal prices. The main result is the new technology diffuses faster, users pay lower prices and the platform earns higher profits when the two-sided equilibrium is compared to the standard one-sided model of diffusion. The reason: the platform wants to obtain a high number of adopters faster to earn more profits from advertisers. Simulations show that the differences increase when either users provide a higher positive externality to advertisers or advertisers provide a lower negative externality to users. Simulations also establish that the diffusion process follows the classic S-shape when the utility of advertisers grows faster than the utility of users. Lastly, the model is tested replicating Facebook's historical data. Given an exogenous calibration for a subset of the parameters in the model, the remaining variables are estimated by nonlinear OLS. The model closely fits the empirical evolution of Facebook's active users and the profits that this social media platform has earned due to advertising.