Based on the Salop model, the paper analyzes the dominant enterprise that has the cost advantage how to choose merger, whether to keep the merged brand and the behavior how to affect social welfare in the market with network effects. The results show that if the network effects and cost advantage both are weak, the dominant enterprise tends to merge but abandon the merged brand. If the network effects become stronger the dominant enterprise inclines to merge and reserves the merged brand. No matter how strong or how weak are the network effects, to retain merged brand will increase social welfare, and to abandon the merged brands will reduce social welfare.