One big difference is that Google is free its customers.
“Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″
91–100 of 260 posts
Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″
#92I 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…
Whats the viable alternative to Google Search? Sure you can use Bing as a customer, but if you're a website operator you HAVE to stay on Google's good side. (not always easy to do) Or you can not base your business on the fickleness of Google's search algorithms. Ben Thompson (stratechery.com) posts one article per week publically and charged $100 a year for his newsletter. The only time he gave numbers, he has over…
"Or you can not base your business on the fickleness of Google's search algorithms."
Or you can not base your business on the fickleness of your phone company's /ISP algorithms. Google is a much as 90% of referrals for many websites.
Answer this: Are you sure that Google updates their search algorithm independent of revenue impact? I remember reading from FTC's investigation that Google kept changing their "independent" SE rater's criteria until it eventually met Google's own goals. You think Singhal didn't know what changes hurt Google's revenue (ad clicks plus sites forced to advertise)?
Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″
#93It would be great to see more balanced discourse on monopolies, especially in a software-dominated world. Most analyses and articles fixate on the costs of monopolies. Let's assume the worst of Google and conclude they abused their search monopoly. Innovation in search was stifled. Competitors were damaged and achieved only a fraction of their potential. For instance, Yelp might be worth $15B instead of $3B in a worl…
Rockefeller was an ardent proponent of Monopoly because to him it was obviously the most efficient system. He controlled the price paid for crude, the manufacture of oil, and the prices paid for transportation. Under this control he substantially lowered prices for the consumer. Of course this also meant that all profits went directly to him making him one of the richest people to have ever lived. Interestingly he al…
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"?
Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″
#94I 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…
Whats the viable alternative to Google Search? Sure you can use Bing as a customer, but if you're a website operator you HAVE to stay on Google's good side. (not always easy to do) Or you can not base your business on the fickleness of Google's search algorithms. Ben Thompson (stratechery.com) posts one article per week publically and charged $100 a year for his newsletter. The only time he gave numbers, he has over…
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Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″
#95Earlier 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.
And switching to bing for search is orders of magnitude easier than switching operating systems.
Don't forget Android.
EDIT: doesn't make your point about switching search engines less valid. It is orders of magnitude easier to change than an OS. But Google now spans other areas besides search.
Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″
#96Earlier quoted context omitted.
Hmm forking Android and turning the ecosystem into a complete mess around stuff like security updates. To the point were a lot of people, including myself, are considering buying a Google device purely to ensure some sort of longevity.
Google only guaranteed support for two years. Not exactly what I would call "longevity".
Two years of OS updates and three years of security updates.
The devices that google had and weren't using Qualcomm CPU got updates for a lot longer (e.g Nexus Player).
It gets very, very annoying for Google to try to support phones that use CPUs that don't update or release anything anymore.
Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″
#97I think it's dangerous of Theil to absolve monopolies as "good". Monopolies can lead to deadweight loss and stagnation.
The human species only has limited supply of attention and "goto mindspace" to reach. Human attention is a natural resources, just like coal, or oil. Imagine if a single petrol company had access to all the oil on the Earth - it wouldn't be good.
On the other hand. There's not much we can do about this problem until consumers start seeing it as a problem. Once consumers do see it as a big problem - we'll have opportunities open to us :)
Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″
#98Earlier quoted context omitted.
I don't quite understand what you are saying. It seem like your saying there is no natural monopoly but rather a government enforced one. Then you seem to say that the ICC did not stop 'anti-competitive' behavoir. I'm not sure what that means, all companies are against their competition. If there is not a natural monopoly why would any government agency have to do anything?
A monopoly is a seller with few or no competing sellers. In many cases this is bad for consumers, so many governments have taken steps to dismantle some monopolies or ameliorate their bad effects. It's not clear that "natural monopoly" is a category that has any members, but the theory is that a natural monopoly is a monopoly such that dismantling it would have other bad effects that would be worse than the direct ba…
> the theory is that a natural monopoly is a monopoly such that dismantling it would have other bad effects that would be worse than the direct bad effects of the monopoly
Hm? That's not what it means. Natural Monopoly actually has a very clear Economics 101 definition: "[a]n industry in which multi-firm production is more costly than production by a monopoly"[1]. Or, paraphrased, a natural monopoly is one where fixed costs/barriers to entry are so high that it is difficult to have competition. It seems that in your OP, you're implying that a "natural monopoly" is one that arises without intervention -- this is often the opposite of the case, governments intentionally create and support natural monopolies when they can identify them.
Telephone service is a great example. Laying physical wires costs a lot of money. Laying the physical wires is probably the most expensive part of providing telephone service. Having multiple companies in competition would result in costs rising for everyone, because the cost to lay the wires is the same for each company, but each company has fewer subscribers to pay off those costs. In this case, a regulated monopoly is the best thing for consumers, with the idea that government regulation would offset the issues that come from monopoly status. "Utilities" as a whole are typically natural monopolies.
1: https://en.wikipedia.org/wiki/Natural_monopoly#Formal_defini... (R.I.P. William Baumol)
Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″
#99The 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…
>Bing seems pretty close in search quality, but yet few switch over. a) Why would anyone switch if they are both equal and both free? b) Most people use chrome. Most people don't change their default search engine. c) As much as people pretend to hate Google, they actually hate Microsoft a lot more, and for good reason. Microsoft operates on bad faith far more frequently than Google does, most of their business decis…
C is only true from the customer's perspective. Google doesn't seem to be willing to crush competition, but they are still willing to acquhire them into being on their own side. Youtube, for example, was clearly superior to google video, so it was purchased. Customers were not very impacted.
Re: “Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″
#100It's hard to see any comparison. At the peak of AT&T's power, they were able to block sales of a third-party device that attached to your phone that helped keep people from overhearing your conversations. The device was just a cup, it didn't do anything electrical, but AT&T still decided they didn't like it and shut it down.
That was eventually overturned in court, but it was a decade-long fight. It took another decade before third parties were allowed to sell devices that transmitted sound through the phone system with acoustic coupling, and another decade after that before you could just plug in your own phone.
For everything Google does, there are viable competitors. They may not be nearly as large, but they're extremely easy to switch to if you want. People don't stick with Google because they have no choice (as would be the case with a monopoly) but because they like it more.