This paper investigates the impact of network externality and product substitutability on the choice of the vertical control structure under the chain-to-chain model, and addresses the evolution process and the equilibrium of the vertical structure from the aspect of manufacturer’s performance and supply chain’s performance. It is revealed that the choice of the vertical control structure is influenced by the the network externality coefficient and the product substitutability. The results show that the centralized control structure is a dominant equilibrium when the effect of network externality on the product substitutability is not strong, and the decentralized control structure is dominant when the effect of network externality on the product substitutability is strong.