I saw an article on Digg, speculating about what search engines would emerge if Google was broken up by anti-trust:
http://searchengineland.com/071230-095315.php
The market share of search engines:
Google is the most used search engine on the web with a 53.6% market share, ahead of Yahoo! (19.9%) and Live Search (12.9%)
"Austrian economics and freedom are not synonymous." -JAlanKatz
Heh. Ever read Vernor Vinge's short story Conquest By Default? Alien anti-trust guys come to Earth and break up governments.
Paul:Heh. Ever read Vernor Vinge's short story Conquest By Default? Alien anti-trust guys come to Earth and break up governments.
Vinge was the one who coined the term "technological singularity", if that's what you're talking about.
I agree with Libertarian. Also, this is worth reading:
A politically incorrect guide to anti-trust
Nathyn: The market share of search engines:Google is the most used search engine on the web with a 53.6% market share, ahead of Yahoo! (19.9%) and Live Search (12.9%)With that high of a market share, it's clear that, provided it doesn't face any major problems, it will soon reach monopoly status, in that same sense as Microsoft.It will dominate the market, not allowing any firm to seriously compete. However, other search engines will exist because they can still generate a marginal profit, because of customer loyalty, costs to provide the product are low, and the consumer surplus is low.
53.6% of market share isn't a monopoly, nor is 75% or even 90%. It takes 100%, or very close to it, to constitute a monopoly. Even then, if they don't forcibly prevent competitors, it could be considered a benign monopoly, or even not a monopoly, since their position isn't held by force.
However, if a company forcibly prevents competition from occurring, monopoly or not, it's still doing something immoral. But what could Google do to prevent its competition from operating, hmm? It's not impossible, I suppose, but I think it would be difficult, given the nature of the internet.
Suppose Google did outcompete all the rest, and have 100% of the market share. What do we expect would happen? It just so happens that Rothbard had something to say about that. Rothbard argued that a company in that position faced much the same situation that Mises described for a central planner. Facing no competition for consumers, they lose effective market signals, and fail to satisfy consumers, opening the door to competition, which will reemerge as long as theres no violent barrier to entry, since there will be a profit opportunity.
Err... Google can't ever be a monopoly, because there is no barrier to entry in search engines or any other website. The only scarce resource Google might monopolize is the trust of internet-goers, and to keep that resource they will have to continue to innovate and offer awesome services.
A better example might be Microsoft. They are hated as a monopoly, and yet they rank only slightly worse than average in consumer satisfaction surveys. I suspect a lot of the drop in '07 has to do with Vista's problems; Windows XP and 2000 were much better (although I'd have thought the X-Box 360 would have helped them quite a bit).
PS: Isn't it interesting that no solvent business experiences consumer satisfaction as low as Congress's? And that the most hated industry is the one with state-granted monopolies, cable television providers?
Nathyn:With that high of a market share, it's clear that, provided it doesn't face any major problems, it will soon reach monopoly status, in that same sense as Microsoft.It will dominate the market, not allowing any firm to seriously compete. However, other search engines will exist because they can still generate a marginal profit, because of customer loyalty, costs to provide the product are low, and the consumer surplus is low.
With that high of a market share, it's clear that, provided it doesn't face any major problems, it will soon reach monopoly status, in that same sense as Microsoft.
It will dominate the market, not allowing any firm to seriously compete. However, other search engines will exist because they can still generate a marginal profit, because of customer loyalty, costs to provide the product are low, and the consumer surplus is low.
Microsoft is not a monopoly. What is a monopoly? Monopoly means that the entry in one sector of the market is blocked.
Large market shares are the consequence of the competitive superiority of certain companies. Some companies have large market shares because they have discovered profitable opportunities before everybody else. These tipes of companies have discovered ways of coordinating individual plans in a more efficient manner.
libertarian:Microsoft is a monopoly. Microsoft uses obvious patents and lobbying to dominate the market. Every software developer knows how buggy and poor quality Microsoft's products are like.
Here's the mainstream mindset. "Monopoly" is loosely defined as having a dominant market share, not that entry into the field is forcibly restricted, that having a dominant market share is proof in itself that a company had done something wrong, and therefore, the government must do something about it. Essentially, these people want to punish people for being successful, not because they can point to any specific initiation of force by the company.
macsnafu: libertarian:Microsoft is a monopoly. Microsoft uses obvious patents and lobbying to dominate the market. Every software developer knows how buggy and poor quality Microsoft's products are like. Here's the mainstream mindset. "Monopoly" is loosely defined as having a dominant market share, not that entry into the field is forcibly restricted, that having a dominant market share is proof in itself that a company had done something wrong, and therefore, the government must do something about it. Essentially, these people want to punish people for being successful, not because they can point to any specific initiation of force by the company.
macsnafu, what is the point of your reply?
How many people in this thread have already defined monopoly as 100% market share and forcible restriction into the market? And then you come in and say, in spite this, that Microsoft is a monopoly. At best, you are using a non-technical, non-economic definition of "monopoly". Microsoft is not a monopoly in any real sense, EVEN IF they are engaging in coercive acts to prevent competition.
However, if most people want something done about Microsoft's alleged monopoly status without proof of those coercive acts, if in fact they consider Microsoft's large market share in itself to be proof of their alleged monopoly status, then that just means they have a bad feeling about Microsoft and are assuming that successful companies can only be so through coercion, and not through successful business practices.
Sorry, this is a bit of a threadjack but I was just wondering what Austrian's have to say on Monopolies, Collusion, Cartels etc.
Do they believe the problems will be self correcting, or is it a legitimant function of governments to 'keep markets free' (yes, I am aware of the paradox :))