Last week, when Microsoft's attempt at buying Yahoo stranded, Steve Ballmer specifically mentioned Google, and how a possible deal between Google and Yahoo would limit choice and competition in the marketplace. Google explained yesterday how it would fend off possible antritrust concerns following an ad-sharing deal with Yahoo. In addtion, Google noted the irony in Microsoft's complaints.
Post a Comment
Member since:
2006-02-05
Google has had a monopoly on search for quite awhile now, and has used their monopoly on search to gain market dominance in the internet ad market.
Just because they have been able to dodge the monopoly stick for this long doesn't mean its not going to happen. They need to be very careful about moves like this, or they are going to learn how fun it is to gain monopoly status.
Member since:2005-07-24
How are they a monopoly? A monopoly entails more than just having a large market share. You can get a large market share simply by being the very best at what you do. Monopoly is less about market share numbers and more about barriers to entry for other players. Unlike switching operating systems, switching search engines is trivial even for less savvy users. I see no real barriers to entry for the competition beyond having the ability to do a better job of search than does Google.
Most Windows PCs I encounter come with IE as the default browser and default to MSN for their home page. Vista let's you click once on setup to choose Microsoft for all your online service needs, and (I believe someone counted and reported) 40 clicks and some know-how to actually set yourself up for non-MS services. (40 may not be exactly right, but I did take a glance for myself and it was a lot.) Even Microsofts desktop OS monopoly leverage has not been enough to counter Google's advantage of quality and effectiveness.
Google does what they do very well. They have a large market share. But they are not a monopoly.
Edited 2008-05-09 12:37 UTC
Member since:2005-06-29
That wholly depends on the definition you employ. I clearly remember my economics professor explaining that a company has a monopoly when it serves like 60% of the market or more (I forgot the exact percentage) - how a company uses that monopoly is irrelevant.
A monopoly does not imply malicious intent or abuse. It might, but it doesn't have to.
Member since:2005-07-24
Rather than focusing on definitions, and whether Google is or is not a monopoly as a matter of academics, perhaps we should focus on the same thing that anti-trust laws are supposed to: protecting the consumer through preserving market competition. In what way does Google's success threaten competition, and thus the consumer? There are no artificial barriers to entry for other players, beyond having the resources to put an infrastructure into place which is massive and well designed enough to challenge Google for speed, ease of use, and quality. To me, that's just good competition, and not a violation of anti-trust laws, in either letter or spirit. Not just anyone could challenge them, of course, in the same way that you or I would have a problem challenging Ford Motor Co. But money and brand recognition are what it takes to try, and Microsoft, e.g., has plenty of both of those. Note that I say that those things are enough to try. If they are not backed up by a superior search service, they will not dislodge the #1 player. And that is what has been the case, thus far, in the search market.
Member since:2005-06-29
That's all great, fine, and dandy, but that's irrelevant. You said Google is not a monopoly, and I said that if their share of the market is large enough, they are a monopoly, whether they abuse that position or not. I just read their share is 53.6%, so I think that technically makes them a monopoly.
You may start talking about anti-trust and abuse and such, but that has nothing to do with being a monopoly or not. It has to do with abusing said monopoly.
Member since:2006-02-05
Now that apple is on x86 computers (which is what the monopoly ruling was on), MS has what, an 80% marketshare (as a very liberal estimate, i could easily argue for 75%)? What kind of marketshare does Google have on search/advertising? And does google leverage its search dominance to help its ad system?
Monopolies do not only exist for operating systems, and they have nothing to do with anything other then market dominance.
Member since:2005-07-24
This is a bit off the topic, but can you back that up? I would be skeptical even if you include server machines. (How I wish that your estimates were correct!) However, the relevant market share category, IMO, is really desktop systems on any processor architecture.
Member since:2006-02-05
Mostly pulled those numbers out of my ass, but typically (depending on the source) apple is put anywhere from 4%-20% of the market, and Linux is put at anywhere from 0.5%-5% of the market.
It depends on the study, the source, and whether we are talking about PCs, PC+Servers, or the home user market. I know from a personal point of view, I know alot of people who have macs nowadays, and from a professional point of view, there is very little more hip in the web world nowadays then RoR on OSX with Textmate and git source control. Not exactly scientific, but those are the trends I both have been seeing in marketshare reports and in the real world.
Member since:2005-07-07
How are they a monopoly? A monopoly entails more than just having a large market share. "
A deal with google and yahoo would make google a monopoly. Google has 59% and yahoo 21% share of the online search market. People didn't start hating Microsoft until they became a monopoly and started doing things to maintain it.
What do you think the barrier to entry is for people who go against Google and are better. Think youtube and google video. What did Google do? They bought them out because google video couldn't compete.
Google couldn't effectively do graphical banner ads so they just bought double click. Embrace and extend any one.
I disagree Google is powerful enough to just buy out a competitor and they have done that in the past. Now Google is everywhere and they have also made sure desktops ship with Google toolbar and desktop by default.
Not yet but their behavior as of late mimics Microsoft. Competition is good. Yahoo and Google together would stifle that. The barrier to entry will be that no one will be able to fund a search engine to effectively compete with google. If Microsoft can't fund and attract talent to compete with google how would a start up.
Member since:2005-07-24
Thank you for addressing such relevant points. Google is indeed big, these days. Their market cap is $180 Billion. Thats about 2/3rd of Microsoft's $274 billion, and larger than IBM's. Google's price earnings ratio is over double that of MSFT, but still, that does give them tremendous buying power. In my opinion, Google has done a pretty good job of not being evil. But that much power concentrated in one place is an open invitation to abuse. Even Gollum did not become so corrupted overnight. It takes time.
I would disagree with your use of the phrase "embrace and extend", but that is only a quibble. I would agree that purchasing competitors is a practice worth noting in the context of judging the health of competition in that (non-search) market. And one which I had not considered, since my focus was on the search market.
I would point out that, to my knowledge, Google has not bought out any major competitors in the search market, and that there are no artificial barriers to entry, currently, in that market. If Google did start buying out major competitors in the search market, I would be gravely concerned.
Edited 2008-05-09 16:17 UTC
Member since:2005-07-07
I would point out that, to my knowledge, Google has not bought out any major competitors in the search market, and that there are no artificial barriers to entry, currently, in that market. If Google did start buying out major competitors in the search market, I would be gravely concerned.
Google isn't buying a competitor but Yahoo outsourcing that part of the business if pretty damn close. While it isn't an outright buy out such a deal should be blocked. The bottom line is user base. If Google has the combined user base I would be very worried.
Remember Microsoft got into trouble over IE for using their desktop monopoly to influence the spread of IE. I don't see much difference with Google using their dominance in search (which means revenue from Ads) to stifle competition or play high stake games.
For example, the 700Mhz auction. Google would never have that much influence if it were not for the money it makes with search. Imagine what Google would be able to influence if it had more. I don't buy the "do no evil" mantra. Getting free access to a spectrum only so that Google may enter it with android to sell more Ads while another company foots the infrastructure costs, seems like a smart business move on the surface but it is down right scary to think google can manipulate things like that with its might. All the while pretending to be good.
Somehow people are willing to have Ads shoved down their throats tracked by usage patterns for free access. What will happen eventually is you will pay for the service just like for cable TV and still have Ads showed down on your throat. There is nothing to stop Google from charging monthly fees once they have tapped out their revenue stream from the free service if they have the monopoly control over the market. Remember they have been buying fiber left, right and center. Once they have more money they can buy out carriers too.
There is a reason why companies like NetZero that used ads to provide cheaper service failed. Now somehow it is ok because it is Google.
Google's Ads are getting more in your face. For example, YouTube has display ads during the clips now. Google just announced that it is going to start putting display ads on google.com. Their initial philosophy was never to be in your face with ads. If that can change I can't imagine the "do no evil" one changing.
Remember "Power corrupts but absolute power corrupts absolutely".
All this might sound overly paranoid but I believe that the bottom line is no one company should ever be as powerful and history has thought us that time and again.
Edited 2008-05-09 16:44 UTC
Member since:2005-07-07
What do you think the barrier to entry is for people who go against Google and are better. Think youtube and google video. What did Google do? They bought them out because google video couldn't compete.
I'm sorry, but how does being bought out constitute a "barrier to entry"? Youtube could have easily resisted any attempt by Google at buying them out. Instead, due to the lack of a viable business plan they found that it was better to be bought out by a large company like Google. There is no barrier to entry there.
On the other hand, if Google had leveraged it's dominant search engine position by refusing to index Youtube and thus preventing any Google user from ever discovering a domain called Youtube, you might have a leg to stand on.
Member since:2005-07-07
What do you think the barrier to entry is for people who go against Google and are better. Think youtube and google video. What did Google do? They bought them out because google video couldn't compete.
I'm sorry, but how does being bought out constitute a "barrier to entry"? Youtube could have easily resisted any attempt by Google at buying them out. Instead, due to the lack of a viable business plan they found that it was better to be bought out by a large company like Google. There is no barrier to entry there.
On the other hand, if Google had leveraged it's dominant search engine position by refusing to index Youtube and thus preventing any Google user from ever discovering a domain called Youtube, you might have a leg to stand on. "
Google does that with liveleak. May be not directly youtube. But Google pro actively refuses to index certain online video sites.
http://www.liveleak.com/view?i=6a6_1176066336&c=1
Buy the biggest most popular competitor and don't index smaller competitors seems like a "barrier to entry" to me. Especially when the site has tried everything to get Google to index them including contacting them multiple times.
Edited 2008-05-09 18:43 UTC
Member since:2007-09-01
And many companies do this, the startups i mean. Theycome up with an idea in order to sell it and then move on to creating the next idea.
IMO these companies don;t like the operative part of the task and just want to gt the concept going and well, as every company, the cash.
I used to work for a company that bought these ideas just to find out, in most cases, that they were crap(regarding software code and arch).
Member since:
2007-04-11
This is an interesting debate and I always thought anyone in an utterly dominant market position is a monopoly by basically establishing standards within that industry.
Alternatively the company which creates barriers to forestall the change in standards is not just a monopoly but stifler of competition.
I think thats where Google and Microsoft differ.
Member since:
2008-05-09
Here is the definition of Monopoly by Wikipedia: In Economics, monopoly (also "Pure monopoly") exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. [1] Monopolies are thus characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods. [2] Alternatively (a modern and less common usage), it may be used as a verb or adjective to refer to the process (see Monopolism) by which a firm gains persistently greater market share than what is expected under perfect competition. The latter usage of the term is invoked in the theory of monopolistic competition.
I am not an economist but Google does not have sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.
Member since:
2005-07-06
I love when I see people throw monopoly around. Monopoly by economic definition means 'over whelming dominance of a given market' - by a monopoly doesn't necessarily mean that they gained it through anti-competitive means nor does it mean that it is maintained through anti-competitive means.
Now, as for Google - yes they are a monopoly, but that doesn't mean that they gained or maintained their share through anti-competitive practices. Under US law, the issue isn't the act of being a monopoly but how that position in the market place is actually used (or abused).
As for Microsofts accusations. If we are really going to make stretches as Microsoft has made, then maybe we should also charge Adobe for collusion with Microsoft on the basis of making their products inferior on Mac OS X when compared to their Windows versions and failing to provide their software line on operating systems other than Windows on generic x86 hardware (Mac's aren't generic PC hardware as Mac OS X cannot be transferred to be run on a generic PC, thus, the two are locked) and thus supporting the Microsoft monopoly - thus, I want Adobe to be forced to port their applications to alternative platforms.
See how silly things become when people making imaginative stretches as what Microsoft is doing?
Member since:
2005-07-08
Monopoly indicates that your position in a market raises a significant or impassible barrier to entry in that market. It also implies that you can leverage that position in anti-competitive ways. It has nothing at all to do with popularity. As far as I can tell, it's as easy as creating a server farm and coding up a few bots to become an online search engine - the fact that google does this best, or at least is the most popular in no way suggests that they are a monopoly.
Member since:2005-07-07
Google has a monopoly in the online ads business, search is just a driving force.
Google is trying to increase that dominance by entering other services such as email, office suites, blogs, online video. To push that dominance in online Ads.
Facebook is gaining over orkut. I wouldn't be surprised if Google made a bid to buy Facebook out eventually. Just like they did YouTube and DoubleClick.
Remember Google is an advertising provider and that is their core business. Search is the major interface people use the web and Ads are the major source of revenue derived from search. Why do you think MS wants a piece of that action?
Member since:2005-07-07
Google has a monopoly in the online ads business, search is just a driving force.
No it doesn't. There is nothing stopping you from starting your own online ads business, other than the fact that Google's Ad Sense is most likely going to be superior to anything that anyone else can come up with.
The Google mafia aren't going to come knocking on your door.
Member since:2006-02-15
No it doesn't. There is nothing stopping you from starting your own online ads business, other than the fact that Google's Ad Sense is most likely going to be superior to anything that anyone else can come up with.
The Google mafia aren't going to come knocking on your door.
You do realize that if someone has a monopoly it doesn't mean no one else can start a similar business...? And note that being a monopoly doesn't mean you use illegal business tactics either. Monopoly just means a business that has 60% or more coverage in some specific business area.
Member since:2005-07-08
http://legal-dictionary.thefreedictionary.com/monopoly
"An economic advantage held by one or more persons or companies deriving from the exclusive power to carry on a particular business or trade or to manufacture and sell a particular item, thereby suppressing competition and allowing such persons or companies to raise the price of a product or service substantially above the price that would be established by a free market."
Not seeing it...
Member since:
2006-06-02
I think people are getting hung up on a (somewhat debatable) purely economic definition, when actually the stakes are much higher.
Google's mission is: "(T)o organize the world's information and make it universally accessible and useful."(http://www.google.com/corporate/). That sounds like domination to me, not just mere monopoly in a defined sector of the economy.
Not presenting barriers to other search companies (for example) does not undermine at all the central proposition of Google's overweening ambition very actively to obtain, capture, hold, collate and index for its own corporate purposes vast amounts of information and knowledge, an aspiration which, if realized by, say, an agency of government or a supra-national body, rather than a certain commercial player in an apparently free market, would have many of us thinking more than twice. Much of the information is generated by and through the public purse, in the form of research outputs, information that Google, despite its vast spending power, could not conjure up on its own (in raw Dollar terms, perhaps, but it could hardly replicate the likes of NASA or the ESA to get the data it wants via http://blog.wired.com/wiredscience/2008/01/google-to-provi.html).
And then of course there is Google Print. Some of the original controversy over copyright, etc., seems to have died down, but there still appears to be something insidious going on here, in terms of compulsion in regard to how much control scholars actually have over the release or availability of works produced as part of their graduate education:
http://earthgoat.blogspot.com/2008/03/theses-and-google-print.html
There are bigger picture things here: the digital information revolution is having an incredible impact on what constitutes the very notion of formal education (can anyone imagine that Plato would have stopped, mid-stride, in the Academy, whipped out his wireless-enabled device and looked up something via Google, before proceeding with, say, the foundations of The Republic? But this is what in effect happens today in academe, at all levels).
Google to some extent is only the biggest symptom of this revolution. However, Google may have the motto of 'don't be evil', but we all know how the road to Hell is paved (with good intentions).
Ironically, perhaps the free market may save us in the end, if recent stories about staff leaving Google as it becomes a seeming Behemoth are credible: http://news.bbc.co.uk/1/hi/technology/7389179.stm
But then again, I always liked being a bit of a doomsayer...
Edited for syntax - too late or early in the day
Edited 2008-05-10 02:32 UTC
Member since:2005-07-08
I doubt many are missing the forrest for the trees here, but that's not what the discussion is about. This is about as relevant to the discussion as the fact that youtube is mostly a sinkhole of useless shit which forces/uses a proprietary media format. Both things I've stated are either objectively or subjectively true, but neither address the subject matter.