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

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

#151

Post by pcwalton »

beagle3 wrote: post #114
pcwalton wrote: post #72

Earlier quoted context omitted.

> Google has a ton of competition across all of its products. It's dominating in some of them but being better then your competition is a lot different then there not being any. This was also true for Microsoft. There were plenty of other operating systems, even PC ones.

But unlike Google (AFAIK), Microsoft played very dirty - they eventually paid for it (see e.g. [0]), but the gains from remaining a not-even-threatened monopoly where at 100-1000 times larger than what they paid. I experienced this first hand at a company I worked for in the early '90s - we had agreements signed with many PC manufacturers to include our software (which was a DOS launcher of sort, that -- in those day…

There are also instances in which Google has played not particularly fairly—releasing Chrome-only products such as Google Earth that require NaCl, for example.

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

#152

Post by kuschku »

zitterbewegung wrote: post #19
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…

What about imgur?

Imgur exists based on the network effect – its pitch was "hey, there’s this huge community called reddit, we can start by providing photo services to them, and then expand, once we have a large enough community and the network effect applies".

And that’s exactly what they’ve done.

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

#153

Post by kuschku »

fosco wrote: post #25
educar wrote: post #10

Earlier quoted context omitted.

I just host my own email these days. Not going to rely on any 3rd party anymore.

do you have a guide on doing this successfully? do you have email on your phone as well?

This is a famous guide most self-hosting users run:

https://workaround.org/ispmail/jessie

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

#154

Post by bunburying »

jhall1468 wrote: post #129
beagle3 wrote: post #116

Earlier quoted context omitted.

I agree with what you wrote, but the comparison is apples to oranges: Google customers are businesses; end users (who CAN switch easily) are the product. Right now the only (supposedly) viable competitor is Facebook, but it's more of an advertising duopoly that divides the market - all the people I know who advertise say that you use FB for brand/interaction/marketing and Google for sales, and for a specific spend it…

> Google customers are businesses; end users (who CAN switch easily) are the product. I am a Google customer. They provide me with a product (Google) which I pay for by allowing Google to display advertisements on the results. A business is also a Google customer. They pay Google to display ads to a visitors to the website. But that distinction is moot anyway. Businesses aren't covered by consumer protections because…

I think you're being a bit mischievous with you definition of customer.

You're really a user; not a customer. Customers pay. Google is selling your eyeballs to advertisers. Advertises are Google's customers.

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

#155

Post by faragon »

In my opinion, Google is a tolerated monopoly because of being efficient, and not being too greedy. I.e. providing many efficient "free" services that work great is a good thing for the society, and in return Google gets a massive lock-in in advertising and information control capability.

So, the dilemma is: if for having such great "free" services is required the existence of that kind of monopoly, should we tolerate it and accept it as a lesser evil?

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

#156

Post by jackcosgrove »

There is another advantage/disadvantage (depending on your perspective) to Google vs. AT&T that I haven't seen discussed.

One of the classical arguments in favor of monopolies is not just efficiency but that they concentrate capital for large-scale investment. In the case of AT&T this occurred with Bell Labs, and it is also happening with Google.

Whether an alternative system could be more innovative is impossible to determine. I am of the opinion that, even in Silicon Valley, the big firms (Bell Labs, Xerox, Google) make the biggest investments and innovations (semiconductors, operating systems, search engines), while smaller startups adapt these technologies to business uses.

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

#157

Post by ghaff »

notduncansmith wrote: post #139
ghaff wrote: post #105

Earlier quoted context omitted.

The assumption around natural monopolies is that they're the inevitable result of the economic dynamics of an industry. Therefore if you carve things up to force competition, the theory goes, you're going to increase capital requirements overall and therefore prices to consumers. It's also fairly clear that at least over long enough time horizons there aren't many natural monopolies.

> It's also fairly clear that at least over long enough time horizons there aren't many natural monopolies. Would you say this is because the benefits to decentralization don't often bear themselves out as visibly as the costs over a shorter time horizon? In other words, is a "natural monopoly" simply externalizing the costs of centralization to the future?

If you're talking about protecting a supposed natural monopoly through regulation, there's probably some truth to that. The thinking probably goes something like "We must protect the public from an unregulated monopoly today." Left unspoken is "And the future is someone else's problem. They'll deal with it if they have to."

As for whether there really are natural monopolies, the classic examples are things like electrical distribution systems. If one company has already wired up a city, it's going to be hard for someone else to come in and wire up the same city in competition. (And may not be a great idea from the perspective of public policy.)

However, over longer timeframes technology change and market forces overturn many monopolies. IBM, Windows, Ma Bell--these were all considered to have monopolies at one time.

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

#158

Post by Retric »

ng12 wrote: post #57
Retric wrote: post #48

Earlier quoted context omitted.

Monopolies tend to be lest cost conscious. So, Google may be over investing in their self driving team which could cause a less efficient solution to win. Picture the MBA where one team Q spends 100m/year per player to get the best players and more importantly keep them from other teams, but Q has a poor coaching staff. The fact Q keeps wining reduces the drive to replace that poor coaching staff, and other teams may…

That's just economics at work though. The guy with more money to blow will always have an advantage.

Not so much. The invisible hand of economics just means the less efficient or less desired producers are pushed out of the market. It's just that the guy with more money can often invest it to become more efficient.

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

#159

Post by AnimalMuppet »

yazan94 wrote: post #146
Erik816 wrote: post #104

Earlier quoted context omitted.

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…

> Also, what does it mean to 'abuse' a monopoly position.

IANAL, but there is a legally precise meaning. (Of course, lawyers will still argue over whether a particular behavior meets the definition.) But it's basically, you have a monopoly in X, and you try to use that monopoly to gain you market share in Y.

For example, let's say Microsoft has a monopoly in operating systems. That's OK, nothing wrong with it, because Microsoft came by that monopoly more or less honestly. But let's say that Microsoft uses that monopoly to try to give it a leg up in office apps (maybe by its own office app people learning about OS changes well before release of the new OS, but competitors not learning about them in time, so that there's a period of time when Microsoft has the only office apps that work with the new OS). That's not OK.

Or let's say that Google has a monopoly on search. That's OK, so far. But let's say that Google manipulates the search results to promote Android (say, by making Android phones come up at the top of the list whenever someone searches for a phone). That's monopoly abuse.

Now, what I'm hearing people complain about is that Google uses Chrome to maintain its monopoly in search. As I said, IANAL, but I'm not sure that counts. That's taking something Google doesn't have a monopoly on (browsers) and using it to try to maintain Google's monopoly in search. That's not the same as monopoly abuse. (It's still sleazy.)

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

#160

Post by Teknoman117 »

So why is he leaving Microsoft out of the mix? He claims Google having an 88% share in advertising is a monopoly, why then claim that Microsoft is not a monopoly when it has a similar share of the PC space?

He says that Microsoft competes in the market with many players, but Google also competes in the market with many players.

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