Linked by Thom Holwerda on Fri 9th May 2008 11:11 UTC
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.
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RE[2]: I note the irony of google complaining about compla
by Thom_Holwerda on Fri 9th May 2008 12:50
in reply to "RE: I note the irony of google complaining about compla"
Member since:2005-06-29
Google does what they do very well. They have a large market share. But they are not a monopoly.
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.
RE[3]: I note the irony of google complaining about com
by sbergman27 on Fri 9th May 2008 13:19
in reply to "RE[2]: I note the irony of google complaining about compla"
Member since:2005-07-24
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
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.
RE[2]: I note the irony of google complaining about com
by google_ninja on Fri 9th May 2008 13:53
in reply to "RE: I note the irony of google complaining about compla"
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.
RE[3]: I note the irony of google complaining about com
by sbergman27 on Fri 9th May 2008 14:03
in reply to "RE[2]: I note the irony of google complaining about com"
Member since:2005-07-24
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%)?
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.
RE[2]: I note the irony of google complaining about com
by Arun on Fri 9th May 2008 15:30
in reply to "RE: I note the irony of google complaining about compla"
Member since:2005-07-07
"Google has had a monopoly on search for quite awhile now,
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.
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.
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.
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.
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.
Google does what they do very well. They have a large market share. But they are not a monopoly.
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.
RE[3]: I note the irony of google complaining about com
by sbergman27 on Fri 9th May 2008 16:16
in reply to "RE[2]: I note the irony of google complaining about com"
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
RE[3]: I note the irony of google complaining about com
by evangs on Fri 9th May 2008 18:30
in reply to "RE[2]: I note the irony of google complaining about com"
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.
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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