“Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″ • Hacker News Board

Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″

#141

Post by [deleted] » Wed, May 10, 2017, 7:09 PM UTC

Aloha wrote: post #115

tuna-piano wrote: post #77

The term "Natural Monopoly" has a special meaning besides just the common definition of both words, which is missing from this discussion, but is in my opinion the most interesting topic of discussion. Basically all software fits the economic definition of "Natural Monopoly". Natural monopolies exist in situations where the fixed cost is large and the marginal (per-customer) cost is small. In these situations, it onl…

You hit it on the head.. https://en.wikipedia.org/wiki/Natural_monopoly I will strongly argue that most utilities are natural monopolies, google is not like that.. anyone could create a equivalent functionality search engine without massive resources to do so, this is most certainly not the case with say, a cellular carrier, where to build out one moderately sized market your're looking at starting cost ~100 million…

[deleted]

Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″

#142

Post by tehabe » Wed, May 10, 2017, 7:09 PM UTC

I disagree on the term "natural", but I agree that Google is a monopoly. A phone company with last mile lines has a natural monopoly because competition need access to the last mile to offer their services. That is the reason that the Bell System was a natural monopoly and essentially every phone company on the planet.

Facebook has a near-natural monopoly I think, because of the network effects of its 1 billion memebers. Microsoft had one too, when everyone was developing everything for a PC running Windows, this got broken due to the web and smartphones.

Building a new search engine is not impossible, you just need a lot of breath and patience.

Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″

#143

Post by yazan94 » Wed, May 10, 2017, 7:10 PM UTC

jhall1468 wrote: post #131

ellyagg wrote: post #46

Earlier quoted context omitted.

But new and small businesses can't switch where they go to raise awareness, which always seems to be an underappreciated consequence of Google's monopoly. You either have to buy Google ads or do SEO, and if you SEO, Google can pull the rug out from under you at any moment and you have no recourse.

Consumer protections are for the consumer, not businesses. Plenty of companies have managed to get brand awareness without Google. If you build your business to be entirely dependent on a single point-of-entry, then your business can have the "rug" pulled out by whatever the owner of that point is.

Not to be pedantic, but can you name any?

Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″

#144

Post by SXX » Wed, May 10, 2017, 7:12 PM UTC

rpiguy wrote: post #106

Unkechaug wrote: post #93

Earlier quoted context omitted.

So are you saying that this kind of situation is considered OK by most people's standards, so long as the party in control acts as a "benevolent dictator"?

Replace the words "benevolent dictator" with "winner." People go to Google by choice, they win based on consumer preference. Unlike say, Windows, there is nothing locking you into Google you don't have to use Chrome or GMAIl, or their search. Yes a lot of people are okay with one company controlling 80% percent of a market if - they get there by relatively fair practices, there are clear and viable alternatives, and…

> Unlike say, Windows, there is nothing locking you into Google you don't have to use Chrome or GMAIl, or their search.

I agree about their search, but problem with Chrome isn't just lack of alternatives. Problem is that Google have too much power over web standards and all of competitors have to follow. Even Mozilla had to implement DRM.

Gmail is similar: Google never directly used their power against competitors, but they make email a lot more centralized. Their intransparent anti-spam make it much harder to run own mail servers or send notifications / newsletters, etc.

Of course almost any company with 60-80% of market share would likely do the same and this is why it's bad.

Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″

#145

Post by yazan94 » Wed, May 10, 2017, 7:14 PM UTC

rpiguy wrote: post #106

Unkechaug wrote: post #93

Earlier quoted context omitted.

So are you saying that this kind of situation is considered OK by most people's standards, so long as the party in control acts as a "benevolent dictator"?

Replace the words "benevolent dictator" with "winner." People go to Google by choice, they win based on consumer preference. Unlike say, Windows, there is nothing locking you into Google you don't have to use Chrome or GMAIl, or their search. Yes a lot of people are okay with one company controlling 80% percent of a market if - they get there by relatively fair practices, there are clear and viable alternatives, and…

Well nothing locks you into Windows, you can always use a Linux distro.

Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″

#146

Post by yazan94 » Wed, May 10, 2017, 7:14 PM UTC

Erik816 wrote: post #104

redm wrote: post #53

I think the key point here is not whether Google is abusing its effective monopoly willingly, its that it exists at all. There may be alternatives, but not viable ones. Try not supporting Chrome or ignoring Chrome requirements such as security mandates, you will go out of business. You can say these are 'good' for the consumer but the fact that Google has the ability to unilaterally change the web itself is partially…

Well, it does matter, because under the U.S. antitrust law it is not illegal to have a monopoly. It is illegal to abuse your monopoly position. See United States v. Aluminum Corp. of America, 148 F.2d 416, 430 (1945) Learned Hand J, the "successful competitor, having been urged to compete, must not be turned on when he wins." European antitrust law is more strict and you can run into problems just for having a monopo…

I think this is a really interesting point. In a capitalist/free-market situation, no one cares if you start a business and fail. Competition is seen as a good thing. But how can you blame a company for winning in its domain against its competitors?

Also, what does it mean to 'abuse' a monopoly position. I don't think its practical to argue that Google doesn't have a monopoly on internet search[1]. When your product name becomes a replacement term for what your product does/is, that just shows how widely used your product is (another example: Q-Tips vs cotton swabs). But how do you prove or argue that Google hasn't abused its position?

[1] https://www.netmarketshare.com/search-engine-market-share.as... (though I don't know how credible this source is)

Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″

#147

Post by kuschku » Wed, May 10, 2017, 7:15 PM UTC

ng12 wrote: post #36

kuschku wrote: post #9

Earlier quoted context omitted.

Google beats the competition in some markets because they have so much power in other markets. If you start a startup even in cloud photo storage, and suddenly Google Photos comes along, you’re dead. No one will fund you anymore, and you’ve basically lost. Google has such an immense amount of network effect, and of knowledge they can gain from dominating in other markets, that if Google enters a market – unless there…

So how do you feel about Apple? When Google wins it's because they make a better product than the other guy. Apple can deliver a clearly inferior product (e.g. the last 5 years of iTunes) and still win because their customers are using iDevices. Google doesn't have that lock-in and they still do really well which makes me feel like they're not really a monopoly.

I consider that also unfair, just like I consider Microsofts participation in the browser market unfair.

That said, I know that splitting companies until they only do one thing isn’t possible.

But Google’s scale of domination is quite unique. Especially recently, as they’ve forced Android devs into using Google services more and more.

Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″

#148

Post by lallysingh » Wed, May 10, 2017, 7:16 PM UTC

ellyagg wrote: post #46

warcher wrote: post #29

Earlier quoted context omitted.

Jesus, yes, how did I have to scroll down this far before I read "ATT was a government monopoly"? Google doesn't have a monopoly on anything. They have the best search engine, but I can switch in seconds. Likewise the rest of their products all have very well established and really quite functional competitors. That I don't use, cause I like the big G, but I could if they annoyed me too much.

But new and small businesses can't switch where they go to raise awareness, which always seems to be an underappreciated consequence of Google's monopoly. You either have to buy Google ads or do SEO, and if you SEO, Google can pull the rug out from under you at any moment and you have no recourse.

There are lots of competing vendors for display ads. You can also advertise on facebook and Bing. For search ads, I donno. If 1 tv channel was by far the most popular, would ads on it make them an illegal monopoly for businesses that wanted to advertise?

Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″

#149

Post by kuschku » Wed, May 10, 2017, 7:17 PM UTC

angryasian wrote: post #74

kuschku wrote: post #9

Earlier quoted context omitted.

Google beats the competition in some markets because they have so much power in other markets. If you start a startup even in cloud photo storage, and suddenly Google Photos comes along, you’re dead. No one will fund you anymore, and you’ve basically lost. Google has such an immense amount of network effect, and of knowledge they can gain from dominating in other markets, that if Google enters a market – unless there…

You must not be paying attention to all the failures that google releases. Google dominates email, but waves and even inbox I would say aren't catching on. They are failing in mobile messaging. Even though they own a huge part of your social graph through phone and email, they still can't get social right. Google owns ITA but Google flights is not the first place you look for plane tickets. Google also owns Zagat, bu…

> They are failing in mobile messaging

Because there is a pre-existing market with network effects. The one thing that Google just doesn’t 'get' are network effects.

Regarding Yelp!: Google has spent a lot of effort (leading even to confrontation in court) trying to kill Yelp!’s business already.

Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″

#150

Post by kuschku » Wed, May 10, 2017, 7:18 PM UTC

deelowe wrote: post #136

ubernostrum wrote: post #102

Earlier quoted context omitted.

I don't mean a live-streaming service. I mean a place where you upload videos for on-demand viewing by others. You will have an uphill battle against Google ranking penalties, while YouTube gets a free pass.

This is getting pretty close to FUD. What penalties are you talking about? As additional examples, I come across Vimeo and daily motion videos all the time when using video search.

Google automatically down-ranks websites if they get lots of DMCA claims. This is documented, acknowledged, and publicly known.

Google also automatically ignores any such claims for their own properties w.r.t search ranking.