logo

Against Monopoly

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.


back

Microsoft vs Google; Squaring off as Justice watches

Fred Vogelstein writes in Wired that Google is drawing increasing attention from anti-trusters link here. He notes that it has gotten too big to ignore and perhaps to tolerate but continues to provide excellent software and services, presenting the government with a dilemma. Break it up or regulate. Definitely worth reading.

I do not think we can reach a reasonable conclusion on a single all-or-nothing position. In many respects both Microsoft and Google are natural monopolies, given the advantages to consumers of having a dominant standard and of being first to market.

In operating systems, Windows is what most people used first when they started computing. Most of us are familiar with it and it works quite well. Apple's operating system is not really relevant, an expensive niche product without the large number of add-ons, many free. Google has now offered an alternative in the form of cloud computing and the Chrome OS. This follows up on its relationship with Mozilla and the Firefox browser and opens an alternative to computer makers, a market for cheap simple computers like the netbook whose sales have been surprisingly good. (HP announced today that its Compaq division will soon offer a basic full size laptop for $298.) Chrome will prosper or not depending on the software that becomes available. By giving the software away, Google really puts pressure on Microsoft. Whether Microsoft can come up with an equally good, fast, down-sized modification of Windows and free software will determine its position in this market. Even if it does, the home computer market will become a duopoly but the advantages of being the standard OS are very high. I tend to go with Google.

The second big competitive area is search. Google's has come to dominate, its quality having stayed consistently ahead of the competition. Microsoft is trying, as well as a number of other search services. Microsoft has worked out a 10-year partnership with Yahoo on search, but for the time being, Google effectively has a monopoly based on quality, tempered by the fact that innovative competition continues to put pressure on Google.

Book scanning is unique in that Google is all by itself for now, although others would like to enter the business. The proposed settlement with copyright holders is problematic. It looks as if others will have difficulty entering, if they have to negotiate licensing arrangements with the copyright holders or buy into a deal similar to what Google has worked out. In other words, the Google deal will be a monopoly with no visible alternative, unless the court forces a major change in terms.

A business we don't normally think of as separate is the server farms that Google has developed. They make possible much of what Google does--indeed, it becomes the cloud in cloud computing. Its technology appears to be leading-edge. When it owns the infrastructure, it is tough to compete with.

Vogelstein begins his article, alluding to the speech of Christine Varney several years ago in which she says that "For me, Microsoft is so last century.... They are not the problem. I think we are going to continually see a problem, potentially, with Google." Varney has now been appointed head of the Justice Department's antitrust division, making her the government's most powerful anti-monopoly prosecutor and in a position to do something about Google. Google will need to watch its behavior to avoid retribution. Watchful waiting may not be a bad solution in a market with two large and highly competitive players, as well as a lot of small ones. It still seems to be producing a rapid stream of innovation.


Comments

And do not forget the miles upon miles of dark fiber they own!

Google's mission is to make the world's information accessible. The next logical step for Google is to provide that access. We are already seeing it attempt to do so at a smaller scale in Mountain View. Couple that with its efforts in ensuring open access in the "white space."

I am not convinced that operating systems are a natural monopoly. The Windows monopoly exists because of deal making that shut out competitors such as BeOS. Prior to this there was no dominant operating system.

Having switched several (non-geek) users from Windows to Linux, there is not a lot to learn for most of them - maybe how to install software, because Linux is very different (usually simpler, but different). Apple now has far too large a market share to be regarded as irrelevant, and their hardware is not expensive on a like for like comparison (although it is true their product line is missing bottom end products).

Chrome OS cannot possible create a duopoly because it is open source. It will be completely interoperable with Linux, because you can install it on top of Linux (it is in fact Linux with a bundle of Google software and customisations).

Hi,

Don't like to nit-pick, but market dominance as a result of serving the customer well without relying on natural monopoly or network effects is not monopoly.

The performance of Bing on its recent release illustrates how fragile Google's grip is, and given the switching costs, if anything better comes along, the market will follow.

The ease with which you can type your search into another engine is minuscule compared to how long it would take you to learn a new operating system...

Hamish.

That depends what you use the search engine for and what you use the operating system for.
Oh my,

Google is no more a monopoly than myspace is, the internet is fickle and they could loose dominance inside of several years. I was floored when she said MS was no longer a problem!! The hell its not, It is however a big campaign contributor ever since they were declared to be a monopoly and then made to apologize and promise not to do it again by the candidate they bought.


Submit Comment

Blog Post

Name:

Email (optional):

Your Humanity:

Prove you are human by retyping the anti-spam code.
For example if the code is unodosthreefour,
type 1234 in the textbox below.

Anti-spam Code
EightTwoCincoThree:


Post



   

Most Recent Comments

Dr. Who?

The Other Dr. No: HIV Researcher Fighting the IP Pirates Hi, First off, I came across your site and wanted to say thanks for providing a great HIV/AIDS

IIPA thinks open source equals piracy Buy college papers at http://buy-essays-now.com and make sure that they are the best

Let's See: Pallas, Pan, Patents, Persephone, Perses, Poseidon, Prometheus... Replying to Stephan: As I noted elsewhere, I'm fine with abolishing the system, just don't think

The right to rub smooth using a hardened steel tool with ridges Finally got around to looking at the comments, sorry for delay... Replying to Stephan: I'm sorry

Let's See: Pallas, Pan, Patents, Persephone, Perses, Poseidon, Prometheus... This is very useful post for the people. I want to write this types article but I do not know about

Let's See: Pallas, Pan, Patents, Persephone, Perses, Poseidon, Prometheus... Seems like a kinda bizarre proposal to me. We just need to abolish the patent system, not replace

The right to rub smooth using a hardened steel tool with ridges I'm a bit confused by this--even if "hired to invent" went away, that would just change the default

What's copywritable? Go fish in court. This post is providing very useful and informative information for the students. I like this post

Update and critique of the proposed GOOGLE settlement Hi!) Informative article about Google INC. I agree with you, that Google is a huge company, that

IIPA thinks open source equals piracy Do you suffer from loads of academic assignments? http://marvelous-essay.net will help you to

The right to rub smooth using a hardened steel tool with ridges Thanks for the information! It's good to know that there are some places showing the consequences

Do we need a law? @ Alexander Baker: So basically, if I copy parts of 'Titus Andronicus' to a webpage without

Do we need a law? The issue is whether the crime is punished not who punishes it. If somebody robs our house we do

Do we need a law? 1. Plagiarism most certainly is illegal, it is called "copyright infringement". One very famous

IIPA thinks open source equals piracy Good post. Thanks for this information. By the way, if students want to get rid of their

Yet another proof of the inutility of copyright. The 9/11 Commission report cost $15,000,000 to produce, not counting the salaries of the authors.

WKRP In Cincinnati - Requiem For A Masterpiece P.S. The link to Amazon's WKRP product page:

WKRP In Cincinnati - Requiem For A Masterpiece Hopefully some very good news. Shout! Factory is releasing the entire series of WKRP in Cincinnati,

What's copywritable? Go fish in court. @ Anonymous: You misunderstood my intent. I was actually trying to point out a huge but basic