defending the right to innovate
Monopoly corrupts. Absolute monopoly corrupts absolutely.
Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.
Robert Cringely has a nice article on pbs.org describing Google's secretiveness and unfair business methods in its advertisement services. A monopolist engaging in monopolistic practices is hardly surprising, and perhaps not worthy of mention even in this site. However I believe Google deserves special attention. Google is slowly but steadily working towards acquiring a dominant position in delivering human knowledge and information. Not only because it is the default search engine for most internet searches, but also because Google is actively storing all sorts of information. Take a look, for example, at its google base project, or at the more famous google library project. Google's chosen motto is "don't be evil", which many interpret to mean "we won't be Microsoft". Indeed, Google distinguishes itself from the software giant because it does thing just right. We all like its products, but this unfortunately increases its dominant position. For these reasons, I believe we should monitor Google's practices very carefully.
I'm not convinced that there is a problem here. Google has a lot of market share - but also a lot of competition. If they try to, for example, play favorites with their search, there are a lot of others - Yahoo, Microsoft, etc. - waiting to step in and take that market share away. I don't think the right measure of monopoly is market share but ease of entry - and generally it is the government that makes entry tough. I don't see that operating here. There is some economy of scale in running a search engine: to be good you have to index everything, but that turns out not to be so costly, as witness Google isn't the only one doing it.
[Comment at 05/30/2006 02:52 PM by David K. Levine]
I agree that ease of entry (and government-imposed barriers to entry) are better gauges of monopoly than market share. FWIW Google's market share has declined the last two years to 50% from 80%. It will be interesting to see if Microsoft and Yahoo! can continue to make significant inroads in the search market.
[Comment at 06/02/2006 08:02 PM by Bill Stepp]
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