How do websites compete with eachother?

[Taras]

How do websites compete with each other?
I understand it's business, but I don't understand how there could be several large websites that do the same thing.

An example would be http://www.blurtit.com/ and yahooanswers.com they both do the same thing(Q&A), how are they both so big?

Or those social exchange websites.

http://www.inetjunkie.com/
http://www.followlike.net/

You can tell they're running the same script, but how are they all so successful.
Can someone explain to me how business works?

I'm thinking about starting up a website, but i'm not sure if the market is to dominated or not.
I was going to start a social exchange site like this: http://www.inetjunkie.com/

[Neil]

Its just the same as offline products where two are in competition with each other. The owner of one product could just be a better marketer of his product ie provide better info, good service, offer an incentive etc.