“Google Is as Close to a Natural Monopoly as the Bell System Was in 1956″
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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 the issue, they are not a standards body.
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)
Whats the viable alternative to Adsense? Especially when it comes to many Geo's that are hard to monetize.
Whats the viable alternative to Android?
Not all aspects of Google's business are so dominated, but where they are, you have little choice but to go with Google and the fact that are dominate in so many key segments is troubling.
Let's be honest, it's not like Google makes themselves easy to contact, interact with, or get support from. They are in many ways a black box.
Ever notice how the transparency reports for Safe Browsing never includes Google Properties or how they are happy to report DMCA issues for the internet, but never for Youtube?
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 2000 subscribers.
There are other ways to build a business that don't depend on search.
Whats the viable alternative to Adsense? Especially when it comes to many Geo's that are hard to monetize.
If you are in a certain niche, find a publication or a podcast that serves that niche and make a direct connection to them. Marco Arment - a one man development shop - created his own podcast based advertising platform that is doing well.
What's the viable alternative to Android
The viable alternative to Android is...Android. Many companies are forking the AOSP version of Android and running their own services, including Amazon in the U.S. and a few companies in developing markets.
The danger Google faces is not that a company will come up with a better search engine, it's that people will start using search engines less as mobile takes over along with digital assistants that give you the information you want.
Facebook is already seen as a place for old people and young people may have a FB page but they aren't posting to it because their parents are on it.
There are also other ways to run a household that don't depend on running water. (Heck, my great-grandpa never complained about having an outhouse.) Are you saying your local water utility should be an unregulated monopoly?
I cannot even begin to explain the insidious local politics surrounding the local water utility in the city where my folks used to live and the way they forced homeowners to hook up to the ever-expanding sewer at cost to the homeowners, regardless of whether their existing septic systems were adequate or not, to pad the pockets of the contractors paid by the city and to aid in further annexation of the area outside the city.
A water utility run by the local government as a monopoly is only regulated by local politics, and if you have any experience with local politics you know that's mostly just figuring out who's the biggest good ol' boy.
(The flip side would be "Are you saying Google should be a nationalized, government-regulated search engine?")
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)?
Business 101 is that you're always in trouble if you depend on one supplier for the majority of your business. The second example I have is John Gruber (daringfireball.com). He never sold ads based on the number of active visitors.
He sells one RSS sponsorship at the beginning of the week and a thank you post at the end of the week. His revenue wasn't affected when he lost half his readership.
You're making the point. It's hard to build an online business without appeasing Google and that they need to is bad for small and fledgling businesses.
It's possible to build an online business without Google, of course. There are usually alternatives to monopolies, just ones that cost a lot more or are much riskier or much lower quality, etc. I don't agree that it's just as easy to build an online business without Google.
In Gruber's case, he built a reputation strong enough that he routinesly gets Apple's SVPs to come on his podcast. He doesn't depend on an ad network. He sells ads directly - one per week.
Ben Thompson built a strong enough following just based on reputation to get over 2000 people to pay him $100 a year for a newsletter.
How "risky" is it to start a blog on the side until you get enough readership to figure out a business model?
A bunch of them were complaining that Uber is being bad, requiring camera permissions, etc. The newer androids have nicer permissions systems, requested at runtime. But they are running Android 5* because the shiny turd of a phone they got supports only that, but looks awesome. AOSP is good and all, but I'll never buy anything that is not a Google device unless I magically have free time to root it and run an OS I trust (which might or might not exist).
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.
Apple uses some third party chips but they haven't had that problem. Currently, iOS 10.3 supports the iPhone 5 - released in 2012. I suspect that iOS 11 when it comes out in September will keep support for all 64 bit iPhones. That would mean the iPhone 5s introduced in 2013 will be supported until September 2018.
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 name becomes a replacement term for what your product does/is, that just shows how widely used your product is (another example: Q-Tips vs cotton swabs). But how do you prove or argue that Google hasn't abused its position?
[1] https://www.netmarketshare.com/search-engine-market-share.as... (though I don't know how credible this source is)
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.)
> Now, what I'm hearing people complain about is that Google uses Chrome to maintain its monopoly in search.
I think this isn't any different than IE or Edge promoting MSN or Bing. I wouldn't say its sleazy, just that they (Microsoft, Google, whoever) is trying to tie their products together to make an ecosystem. Like how iPhones come shipped with Safari (another Apple product). But then again, IANAL either.
For public policy, the existence of a monopoly is neither here nor there. Monopolies are problem ONLY IF their operations causes negative economic effects to consumers - typically by raising prices. Indeed in many cases (eg. Transport, Infrastructure) a monopoly is actively granted in return for guaranteed availability and pricing.
In Google's case, it would be very very difficult for any lawyer to show how their actions actively hurt consumers - note consumers, not businesses.
Google clearly has a monopoly. Eventually they will abuse it, even if they're not doing so already (which is open to debate). The stronger their control, the more damage they will do and the harder it will be to release ourselves from it.
Monopolies are bad, although sometimes they are the least bad choice. I see plenty of good alternatives to Google's monopoly.
The more I think about it, the more it seems as thought we need to put a price tag on the data companies collect about users. Google may be raising prices all the time by tracking more and more data about you, but this is completely opaque because even though information is "the new oil" no one puts a real price tag on it.
Couldn't it be argued that Google's featured snippets and accelerated mobile pages will lower the revenue of content creators and thus decrease consumer surplus in the long term?
Google lawyers have undoubtedly analysed the case with a fine toothed comb and would likely use the permissive open source licenses under which it provides Android and Chrome sources (and allows manufacturers to roll their own versions) to argue they don't restrict anyone.
iOS.
What do you mean by that?
Google doesn't have a monopoly on anything. They have the best search engine, but I can switch in seconds. Likewise the rest of their products all have very well established and really quite functional competitors. That I don't use, cause I like the big G, but I could if they annoyed me too much.
I think what a lot of people want is inbound warm leads for free, without actually reaching out to do sales.
And no, that's not gonna happen. That ship has sailed long ago. You could go viral, that's still a thing. Viral content has never been able to spread farther and faster, although it's pretty damned competitive these days.
Google has a monopoly on search ads in the same way that McDonald's has a monopoly on the Big Mac.
Fact of the matter is that they have a huge influence on the entire economy, and this influence is orders of magnitude greater than any other company.
This is silly, Facebook and Amazon's influence is comparable, if not more. And I'm not even talking about the banks.
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?
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)
The interesting part to me is that in terms of cost a monopolistic company might be the most effective. The problem is just that cost and price don't have much to do with each other. A monopoly provider is unlikely to actually provide low prices unless he knows competition could emerge.
Having two parallel infrastructure might be less efficent in terms of cost, but could still be more efficent in terms of prices to the consumer.
Both politicans and economist have argued that just having government step in could provide low cost and low price.
I think this assumtion is flawed. Having multible infastuctures adds layers of competition that even with government services or regulation are hard to achive. How well you utilise your infrastructre, what sort of payment structure are costumers provided with, quality of service, how for and in what direction do you grow your network and so on.
Government stepping in can maybe solve the short term problem, but if think about the long term, letting this market be free of a government regulated monopoly procides the chance that another company can come in, either starting in places where the monopoly has not reached and expand from there or start where the consumers hurt the most and try to expand from there.
I think the answer here is probebly differnt for every industry, laying a cable and a sewage system have very different cost structures.
The most important thing about these regulation seems to be that you never exclude competition explicitly. So you could regulate a infrastructure provider and give him price ceilings or something.
You say: dismantling it would have other bad effects that would be worse than the direct bad effects of the monopoly
I wanted to clearly state that it's not some sort of abstract "other bad effects", it's that prices would increase for the consumer if the monopoly was disbanded.
My thought/critique of ghaff's comment involves physical last-mile infrastructure. Alternatives to regular natural monopolies exist, but we'd have to have some pretty tight regulations on how, say, land beneath or above roadways could be used.
The idea of having monopolies at local scales that compete at larger scales makes sense to me. But replicating last-mile infrastructure seems wasteful/bad/hard to solve (multiple companies building overhead power lines? multiple companies laying wire beneath roadways and apartment buildings? how do we deal with public land being used for private infrastructure purposes?) without some sort of regulatory control.
Looking at it over sufficiently long time horizons and saying "well, it's all temporary anyway" kinda buries the purpose of even having a discussion.
First/last mile (depends on one's perspective, you know) really is the only remaining support for the whole rotten edifice of USA telecom. Thus it's instructive that FCC fights at every turn to stymie white spaces, SDR, or any other 21C radio technology. When the consumer can choose from many ISPs, the first competition in a century will kill every existing firm.
It's also fairly clear that at least over long enough time horizons there aren't many natural monopolies.
There is a nice private solution to this, and this sort of thing is not talked about enough.
Imagen we have two companies, both are ISP with their own infrastructure. Then because of other reason a new expensive infrastructure project is needed. These two could ban together and form a new organisation (non-provit or a club) that economises on the infrastructure but provides access and price garanties to both companies and maybe even sell access capacity to third parties.
The differnce to a normal company providing infrastructure is that the costumers of that company always need to be afraid of price raises. Once you have this club situation you essentially have one infrastructure, but you avoid monopoly pricing because competitive game has moved to a higher abstraction. This would provide very low cost and very low price to consumers.
If you apply a regulatory system as soon as you think there is a natural monopoly the industry will almost certantly stagnate.
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?
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.
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.
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 is usually clear which one gets it (and seldom if ever anyone other than FB or Google).
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 they aren't "consumers".
You're really a user; not a customer. Customers pay. Google is selling your eyeballs to advertisers. Advertises are Google's customers.
And the important distinction if you want to counter the argument that the person you're replying to is making:
Customers pay with money. "paying" with a currency like privacy or convenience isn't actually paying. If you aren't paying for something with money you aren't a customer, you're a user.
Rest assured that if you were a google customer, the IRS would want their pound of flesh from that barter exchange you and google are having.
It seems Google's primary competitive advantage is a well-architected technology platform (though Steve Yegge may disagree) and the world's top talent. But there's nothing like the kind of total control over critical infrastructure that the Bell System had which is the definition of natural monopoly.
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 world without "evil" Google.
But Google's search monopoly and concomitant cash flows also gave society free worldwide communication, self-driving cars, cheaper smartphones, free digital maps, and countless other benefits.
All policies hurt some and help others.
Before supporting or rejecting a policy, it's wise to consider the overall benefits to society instead of focusing only on the injured parties. Why should thinking about monopolies differ?
To reiterate, this is neither endorsing nor disparaging monopolies. It's a request for objective analysis and updated thinking to reflect the potential new realities of monopolies like Google that give products away for free.
To be clear you can't be sure those things wouldn't be around if google hadn't had a search monopoly. Maybe we would have even better digital maps for example had there been way more firms competing. Monopolies can't just be measured by the businesses that they outcompete but also in all the never-realized businesses who their market domination discouraged.
Android didn't make smart phones cheap, maybe slightly cheaper, but not cheap.
Still waiting on self driving cars.
The tremendous and highly complex industrial development which went on with ever accelerated rapidity during the latter half of the nineteenth century brings us face to face, at the beginning of the twentieth, with very serious social problems. The old laws, and the old customs which had almost the binding force of law, were once quite sufficient to regulate the accumulation and distribution of wealth. Since the industrial changes which have so enormously increased the productive power of mankind, they are no longer sufficient.
The growth of cities has gone on beyond comparison faster than the growth of the country, and the upbuilding of the great industrial centers has meant a startling increase, not merely in the aggregate of wealth, but in the number of very large individual, and especially of very large corporate, fortunes. The creation of these great corporate fortunes has not been due to the tariff nor to any other governmental action, but to natural causes in the business world, operating in other countries as they operate in our own.
The process has aroused much antagonism, a great part of which is wholly without warrant. It is not true that as the rich have grown richer the poor have grown poorer. On the contrary, never before has the average man, the wage-worker, the farmer, the small trader, been so well off as in this country and at the present time. There have been abuses connected with the accumulation of wealth; yet it remains true that a fortune accumulated in legitimate business can be accumulated by the person specially benefited only on condition of conferring immense incidental benefits upon others. Successful enterprise, of the type which benefits all mankind, can only exist if the conditions are such as to offer great prizes as the rewards of success.
The captains of industry who have driven the railway systems across this continent, who have built up our commerce, who have developed our manufactures, have on the whole done great good to our people. Without them the material development of which we are so justly proud could never have taken place. Moreover, we should recognize the immense importance of this material development of leaving as unhampered as is compatible with the public good the strong and forceful men upon whom the success of business operations inevitably rests. The slightest study of business conditions will satisfy anyone capable of forming a judgment that the personal equation is the most important factor in a business operation; that the business ability of the man at the head of any business concern, big or little, is usually the factor which fixes the gulf between striking success and hopeless failure.
Now this is Teddy Roosevelt in 1901 but tell me that doesn't sound an awful lot like today! And this is the president known as the trustbuster, speaking in general favor of business. I won't spell out how he reconciles this with his general opinion in favor of antitrust regulation because hopefully that hook can get you to read the rest of that speech here.[0] And here[1] is a speech by John Sherman. These are the men who convinced our country of the importance of antitrust over 100 years ago and much rings true today. Perhaps we should consider these arguments first so we can at least avoid retreading old ground.
And to plug one article I love, check out Bloom and Bust by Philip Longman[2]. He uses this quote from Woodrow Wilson in 1912:
Which do you want? Do you want to live in a town patronized by some great combination of capitalists who pick it out as a suitable place to plant their industry and draw you into their employment? Or do you want to see your sons and your brothers and your husbands build up business for themselves under the protection of laws which make it impossible for any giant, however big, to crush them and put them out of business, so that they can match their wits here, in the midst of a free country with any captain of industry or merchant of finance … anywhere in the world?
[0] http://www.emersonkent.com/speeches/controlling_the_trusts.h...
[1] https://babel.hathitrust.org/cgi/pt?id=wu.89098552482;view=1...
[2] http://washingtonmonthly.com/magazine/novdec-2015/bloom-and-...
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 fail to compete so they may give up on the playoffs instead focusing on cheaper players.
Not fast forward 20 years and the sport is overall in a worse position with Q lowering standards because nobody else is really competing. For a more relevant example consider the IE 6 stagnation before Firefox.
http://www.siliconbeat.com/2016/05/20/apple-microsoft-google...
While Apple has a larger total cash horde ~(216 billion) only 7% of that is in the US or 15B, Google has a larger US cash horde @$73B * 31% = 22.6B making it the largest accessible cash horde in the US.
PS: The ~$1.68 trillion in cash held by U.S. companies at the end of 2015 is kind of misleading as financial companies are required to hold cash on hand and thus can't use it for R&D or they are keeping money out of the US while waiting for a Tax holiday under Trump or possibly some other administration.
Another way to look at it is after breaking up AT&T it created a lot of horribly dysfunctional companies. Verizon is a long way from greatness, but many of these guys where far worse and then went out of business because they where inefficient. Remember, it was the same people, tech, and business models before and after the breakup, but busting up AT&T exposed problems to market forces which then went away.
I am fine saying the rot has yet to set in at Google. But, give it 20 years and expect the same kind of problems because of human nature.
PS: Granted, this does not really answer your so what, but efficiency in the long term really is a boon to society.
I don't think you can really call self-driving cars a win for Google at this point. It looks like they might be beat to market by actual car companies, which would be a really devastating outcome for Google.
Today Google might be in a similar situation where the thing that will take down their huge position of control is not bad behavior toward their end users but a well justified fear that that power can be abused (and would be abused by most people)
Yes a lot of people are okay with one company controlling 80% percent of a market if - they get there by relatively fair practices, there are clear and viable alternatives, and the consumer isn't forced to use them.
Now if the behavior of the "winner" starts to have clear, negative effects on consumers and consumers are no longer happy, the story changes considerably.
Maybe I could see an argument against the greater Google ecosystem (Android, Google Play, which does lock you into Google), or the distributor of content also being a content creator, etc.
I agree about their search, but problem with Chrome isn't just lack of alternatives. Problem is that Google have too much power over web standards and all of competitors have to follow. Even Mozilla had to implement DRM.
Gmail is similar: Google never directly used their power against competitors, but they make email a lot more centralized. Their intransparent anti-spam make it much harder to run own mail servers or send notifications / newsletters, etc.
Of course almost any company with 60-80% of market share would likely do the same and this is why it's bad.
If there feature video on YouTube / Netflix won't play without everyone going to implement it anyway.
Another way to improve situation is to get rid of shady black lists BS like Spamhaus and replace them with proper organizations. Google could also create some consortium to improve protocols, implement easy to use mail servers that send everything properly out-of-box, then enforce DKIM usage, etc.
But no, Google need nothing of it because they have huge market share and directly benefit when non-Gmail services become unreliable.
Monopoly power. It's clear that Google does not have pure monopoly. Google has so called monopoly power.
Monopoly power can create barriers to entry with different mechanisms. Some examples
* reduced number of competitors
* limit pricing
* set-up costs
* loyalty schemes
* vertical integration
* horizontal integration
* economies of scale
* network externality
Company or companies having monopoly power does not automatically mean that they have to be divided or cut down. It means that they have to work under more restrictive rules that disable some advantages of having monopoly power.
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Personal analysis:
I think Google, FB, MS, Apple, Amazon are doing their best using their monopoly powers get leverage and creating internet economy where distributive innovations sell to the big players and they are able to maintain the monopoly.
How to deal with that is complex issue. Limiting monopoly powers should be done intelligently.
The breakup arguably changed Bell Labs, hurting its ability to hire talent as well as its access to resources.
Is that what you're saying?
killing a person and killing a competitor are very different. if they were identical, jeff bezos would be serving 1000 life terms. :)
the desire to dissolve monopolies is based on frameworks defined decades ago. the question is whether these frameworks are as applicable today -- and in particular to software companies like google that do not charge consumers (with money).
perhaps these old frameworks remain applicable, but it's difficult to consider their conclusions valid if they are biased to only see harm. that would be like saying cars and airplanes are terrible because they ruined the railroad industry.
to reiterate, maybe society is worse off with monopolies. but one cannot credibly make this assertion without considering both the costs and benefits.
Abuse manifests itself in many ways, only one of which is the stifling of innovation.
Let us consider the lookalike audience feature in Facebook and Google. You, the engineer, are tasked with improving the efficiency of the system. You are told that a 1% improvement in the effectiveness of this targeting produces like a gazillion dollars in the company's bank account.
You start by running some numbers to understand the effectiveness of the current system. You need some metrics to do this, obviously. One metric is the click through rate of an ad when it targets a certain lookalike segment, which is probably easy to measure. But then you see if it lead to a purchase - but how can you do this? In the world of ad-ROI measurement, this is like the last mile - the so called click attribution problem.
You come up with the following suggestions to your bosses:
1. Capture more of the data going through the inter-pipes. Create Google Analytics so you know who goes to which website. Have people logged in to Facebook permanently, often without their knowledge. Make apps which ask for all kinds of permissions which they don't need. Create devices which are capable of tracking anything you want, and you control the switch remotely.
2. Buy every company in sight which might have collected some reasonable amount of data
3. Start making data triangulations. Collect and purchase datasets which allow more of this.
4. To get people to spend more with you, expand the size of the smallest sized lookalike segments (larger surface area for ad targeting). This will at some point take you back to steps 1, 2 and 3.
Imagine all this going on at Google and Facebook scale.
But wouldn't this all happen even when there are no monopolies? Perhaps, but there would be a lot of potential for data brokerages. And those data brokerages, not unlike markets of goods and services, will start assigning accurate prices for personal information. The monopolies are preventing these data brokerages from being created. They are cutting out the middlemen, so to speak. And more often than not, they are doing it with the sort of impunity that was inconceivable even a few years ago. Right now, no one really knows if their personal information is worth anything. But if it wasn't worth anything, then Facebook to a larger extent and Google to a smaller extent, wouldn't be nearly as profitable. There are many startups being created today which don't want to call themselves that, but are glorified data brokerages with the explicit goal of being acquired by a tech giant to get a big payout in return for the consolidation of often private information.
For example, around 2012 I heard of the idea of 'privacy lockers' where people will put their personal information and all companies will have access to it, but for a price. Imagine that! If that had actually come into existence, Facebook would have been acquired by the privacy locker company of course. Which in some ways only leads us back to the original problem.
So the next question is whether this consolidation in and of itself is a bad thing? I don't know, is a nuclear weapon dangerous when it is controlled by a madman? It is worse in some ways. We can't be certain about either the potency of the weapon (private data) or the sanity of the people in charge (corporate motivations).
There will be a reset button at some point. Splitting up the companies into smaller entities seems like a hasty conclusion today. When (not if) these tech giants cross some unacceptable privacy boundaries, the resulting backlash is going to result in a lot of wistful "wish we could go back in time when splitting was still an option" thoughts.
How is that now?
"YouTube makes $9 billion in annual revenues, but artists earn more from the sales of vinyl records than online streaming"
It's a useless comparison. Perhaps the vinyl industry is worth more than $9 billion. Not all of YouTube is music streaming. More artists are on YouTube than release vinyl. A single artist that has vinyl releases and has videos on YouTube may earn more from the vinyl, but there are many more artists on youtube who don't sell vinyl.
The article is good and has a valid points, but it's important to put comparisons you can actually compare.
Then "... Levon Helm, who was forced to put on a series of concerts at his home at the age of 70, while dying from throat cancer, in order to pay his medical bills"
Sounds like a story about medical bills / lack of insurance, not a story about digital music sales. Plenty of other people get throat cancer and aren't famous enough to put on concerts to pay the bills.
This was also true for Microsoft. There were plenty of other operating systems, even PC ones.
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 days of Win3.0 barely coming out, was more favored by users than Win3), and then all of a sudden, within 3 weeks, every single one of the manufacturers canceled -- and it later turned out Microsoft just visited each and every PC manufacturer and told them their MSDOS "discount" is going away if they bundle our launcher or anything similar.
In other markets, e.g. Office. in which, at the time, they were not a dominant player (Lotus123 was king, Borland Quattro was a strong player, Excel was less so; WordPerfect was king of pword processing), they actually competed by turning out better products.
[0] http://www.computerweekly.com/news/2240052523/BeOS-will-live...
However, I think this is not comparable to what Microsoft did in the OS business (the story I told, BeOS, DR-DOS, IE Bundling) -- an apt comparison would be if the Google Search Engine had been Chrome only, or mobile Googling was Android only.
Google Earth is a niche product - I don't see how this (or any other less-than-fair Google practice I've ever heard of) can be considered abusing one's monopoly in any way.
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.
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’s regulations or network effects that prevent this – they immediately dominate it.
They have unilateral power to bury someone in search results though. Which can effectively require them to use adsense.
I don't think this is reasonable. Buy our other product or get poor search results. There's a few really good examples on other threads here. The best example I saw involved a hypothetical YouTube competitor facing a large number of DMCA takedowns, they may be complying with the law, but the takedowns will give google an excuse to bury them in search results forever more, while they can "excuse" YouTube.
That said, I know that splitting companies until they only do one thing isn’t possible.
But Google’s scale of domination is quite unique. Especially recently, as they’ve forced Android devs into using Google services more and more.
Many cases where battery optimizations "accidentally" kill the competition, which is fixed 3 releases later, but by then, there is no competition left anymore.
Size gives you advantage, but its not an auto win.
Google Photos has crushed all the other startups in the space because it's so good, not because it's been forced on everybody by a monopoly. Their other apps that aren't good enough to take over a market don't take over a market.
Because they have the issue of existing competitors with network effect.
> Google Photos has crushed all the other startups in the space because it's so good
And why is it so good? Because Google uses an advantage they gained from (partially illegally) datamining user data.
Google Duo is better than Skype, Google Allo is better than Telegram.
They don’t take over the market only because Skype and co have existing userbases – network effect.
Sure, if you want to pick the weakest competitor, they're better. Duo competes with facetime, not skype. Allo competes with WhatsApp, not Telegram.
Yes, part of what makes Google Photos good is the integration with their other products. "network effect" is a thing. But leveraging your other products is not the same thing as being an illegal monopoly. iCloud Photos has a network effect. Facebook's photo sharing product has a much larger network effect than Google's.
Yet Allo has less users than IRC, or Signal, or Telegram. And Duo has less than Skype.
The network effect is very powerful, and the network effect of social contacts is stronger than the network effect of software integration.
Google dominates email, but waves and even inbox I would say aren't catching on. They are failing in mobile messaging. Even though they own a huge part of your social graph through phone and email, they still can't get social right. Google owns ITA but Google flights is not the first place you look for plane tickets. Google also owns Zagat, but foursquare and yelp still dominate.
I think the argument only looks at the wins and completely ignores everything else.
Because there is a pre-existing market with network effects. The one thing that Google just doesn’t 'get' are network effects.
Regarding Yelp!: Google has spent a lot of effort (leading even to confrontation in court) trying to kill Yelp!’s business already.
Google has network effects as well as they own Android dialer, hangouts, google messenger, and email. I don't buy this argument. They just failed.
Also you'd be the first person I'd see that defends Yelp's business model, but yeah I'm not familiar with the Google vs Yelp court case.
Google copied Yelp!’s ratings, showed them without any backlink in Maps and Places.
Once Yelp! complained, Google told them to either suck it up, or to use robots.txt to opt-out of Google search entirely.
"If you want to be in the index, you have to allow us to scrape your data and present it however we want".
This is a big part of the current EU Antitrust case, btw.
I find it difficult to see Google as a monopoly when Apple has an even bigger market cap.
What will happen is that you will get a flood of DMCA takedown notices, and Google will get a flood of DMCA takedown notices for your site. Then Google will penalize you in search rankings for being a source of so many DMCA notices. Meanwhile, YouTube -- which generates far more takedown claims than you ever will -- is exempt from that ranking penalty because it's a Google service.
The same is true of a lot of other areas; Google can and does use ranking penalties and placement priorities on the search-result pages to give preferential treatment to its non-search businesses. How will you compete with that?
You will have an uphill battle against Google ranking penalties, while YouTube gets a free pass.
Google also automatically ignores any such claims for their own properties w.r.t search ranking.
And that’s exactly what they’ve done.
this is a bit farfetched. do you really want to blame the internet for the immense fuck up health care has become? really?
Natural monopolies exist in situations where the fixed cost is large and the marginal (per-customer) cost is small. In these situations, it only makes sense for one company to exist, as each additional company that exists will just increase that large fixed cost, while not decreasing the per-customer cost. Therefore, each additional company just increases the the total societal and average per-customer cost.
Natural Monopolies have been defined and talked about for longer than software has been around. The long-running natural monopoly example has been that it doesn't make sense to have two power lines to your house. Another historical example includes newspapers, who have fixed article writing costs, but can distribute it to every customer in a city. Some people consider that Wal-marts in small towns are natural monopolies, given the fixed cost of a large store, and the lack of a market for more than one store in a given area.
Software, of course, has large fixed costs and small per-customer costs.
The questions for me are:
-Historically, why have some natural monopolies been considered bad (railroads, utilities), and needing regulation, and others (newspapers, Walmart) not?
-Is Google's advantage really as a true economic natural monopoly, or is it just a really powerful habit and brand? Bing seems pretty close in search quality, but yet few switch over.
-If the economic definition of natural monopoly exists at Google and most software companies - why are there countless exceptions in software: database software (Oracle, SQL Server, DB2...), Web browsers (Chrome, Edge, FireFox, Safari), calculator apps, etc?
-What are the current issues with potential natural monopolies at these software companies, and would a regulated model make them better or worse for society?
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 decisions seem to revolve around the question "How do we leverage product A to force the user to use our product B?" whereas Google's anticompetitive behavior has always been more passive.
Google also leverages Android to force people to use all sorts of Google products, using their agreements with OEMs which ensure things like default search, default maps, default email setup, etc. That's the whole point of Android.
Google's anticompetitive behavior is extremely active, and they make Microsoft look like an innocent kitten in comparison. It sounds like you don't know a whole lot about how Google operates as a business.
It sounds like you don't remember Microsoft back in the day. Google "Halloween Memos". (Edit: Note particularly the bit about "de-commodifying protocols", that is, finding ways to break standards and create lock-in.)
Microsoft literally paid web sites to put HTML in their pages so that Netscape wouldn't handle properly.
Microsoft literally generated false error messages when they detected a product from a competitor. (IIRC, that one was on a spreadsheet, and the product was maybe a DOS clone? There wasn't anything wrong with the clone, but the error message made it look like there was.)
An equivalent, today, for Google would be if, when you typed bing.com into Chrome, it took you to Google. Or if Android detected Microsoft apps and made them break in mysterious ways.
ouid's point is valid. Google is more passive in anticompetitive behavior. (That doesn't make the behavior good. It makes it less bad than Microsoft. Microsoft is hardly the "innocent kitten" here. However, I will concede that Microsoft hasn't been as bad as they were for... maybe a decade?)
But at least you can acknowledge that there's almost no comparable evidence of anticompetitive behavior from Microsoft in the last decade. But I acknowledge as well that if Microsoft were in a monopoly position again, as Google is now, they would be up to the same hijinks.
That grossly simplifies the origin and existence of Chrome. While it's true that Google is the default omnibox search (I'd argue that "people don't change their default search engine" is a really weak way to "force" people to use a browser---too weak to justify building a whole browser by itself), you have to remember the ecosystem of browsers that were on the market when Chrome hit the scene. Flash was all over the place, and memory protection between open windows / tabs was nonexistent; a misbehaving browser plugin (and there were a lot of them at the time, including Flash) or a bug in JavaScript could cripple your entire session in IE, Safari, and Firefox. Google's business model is very much centered on the web (not just search, but ads and office productivity applications); strategically, it was risky of Google to be in the position of being, essentially, application developers for platforms they didn't have any controlling stake in. They needed to be in a position where they could---for example---improve process isolation, rendering engines, and JavaScript engines instead of delaying projects until the three dominant browsers got around to making the technological features Google saw as important a priority.
I assume "And it defaults to the Google search engine" is in there too, but that's a bit like saying General Motors makes cars so they can get their stereos into people's hands.
https://en.wikipedia.org/wiki/Natural_monopoly
I will strongly argue that most utilities are natural monopolies, google is not like that.. anyone could create a equivalent functionality search engine without massive resources to do so, this is most certainly not the case with say, a cellular carrier, where to build out one moderately sized market your're looking at starting cost ~100 million dollars, and around 5 billion to start for a national carrier (250k a site, times 20,000 sites)... and my numbers are likely too low by half, because they only factor in the site costs, not the overhead to get to the point where you can build sites.
I'm not sure it's that cheap. Bing launched in 2006. Billions of dollars were sunk into it by a major company who used their monopoly over desktop to push the service. And it only became profitable in 2016.
The barriers to entry seem extremely high.
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?
AT&T had a monopoly on long distance service. The natural monopoly is the last mile. Even after Ma Bell was broken up, all the local natural monopolies were still there. Bell Atlantic (now Verizon) didn't serve the same territory as Southwestern Bell (now "AT&T").
The way that Ma Bell became a national monopoly is that nobody originally prevented them from leveraging their last mile monopolies. If your network is the only way to reach millions of telephone customers in your service area, a smaller provider has no choice but to deal with you, and so absent regulation the bigger telco can charge whatever they want for interconnection. They can also show up with an offer to buy your network for cost in one hand and a bankruptcy-inducing interconnection bill in the other. If this sounds to you anything like the current debate over network neutrality, well spotted.
Google isn't AT&T, they're IBM.
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 :)
Ma Bell's users were Ma Bell's customers.
Google's users are not Google's customers - they are Google's product. Google's customers are advertisers, and it is there where Google has a monopoly, and talk of "cost of switching" is meaningless in that respect - other advertising venues are meaningless for most advertisers.
TBH, if I can't find something on DDG, google won't have anything useful either.
He says that Microsoft competes in the market with many players, but Google also competes in the market with many players.
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.
If you wanted to tax people for research, the government can do it way more directly, without depending on the good will of a few rich people.
Of the interview, this was by far the most interesting question and he didn't really answer it.
It could be argued that at the root of the net neutrality crisis is that cable companies don't have to risk a race to the bottom. If they did, they'd sing a different tune, if only to use "we will deliver everything to you without playing favorites or selling your data" as a sales pitch.
Facebook has a near-natural monopoly I think, because of the network effects of its 1 billion memebers. Microsoft had one too, when everyone was developing everything for a PC running Windows, this got broken due to the web and smartphones.
Building a new search engine is not impossible, you just need a lot of breath and patience.
1) no immediate monetary cost ($)
2)or shorthand for freedom, as in related to liberty. However,
"Generally, liberty is distinctly differentiated from freedom in that freedom is primarily, if not exclusively, the ability to do as one wills and what one has the power to do; whereas liberty concerns the absence of arbitrary restraints and takes into account the rights of all involved. As such, the exercise of liberty is subject to capability and limited by the rights of others."
The IRS doesn't consider "time" or "privacy" a payment; if they did, you would have to report your internet browsing on your tax return because barter.
Maybe internet companies should scale horizontally and not verticly in their product offering after they reach certain size?
People who use some Google services tend to use mostly Google services. People who use some Microsoft services tend to use mostly Microsoft services.
Without much stricter regulation to at bare minimum require more intercompatibility between competing ecosystems, I don't see this effect decreasing.
At the moment I'm still tied to Chrome for bookmark sync but that's about it.
You can sync bookmarks with Firefox, too. And you should be able to migrate your bookmarks just as well...
This sounds nothing like a monopoly.
"Employees of Alphabet and its subsidiaries and controlled affiliates (“Alphabet”) should do the right thing – follow the law, act honorably, and treat each other with respect."
"If you are employed by a subsidiary or controlled affiliate of Alphabet, please comply with your employer’s code of conduct."
Google code of conduct: https://abc.xyz/investor/other/google-code-of-conduct.html
"Don't be evil."
This is a silly game. Proof by corporate motto.
What's your recommendation for e-mail replacement?
I used this for setup: https://help.ubuntu.com/community/Postfix
To get a full stack going with proper SSL auth it is somewhat involved. The good thing is once you do it, it works reliably and you OWN your email. Complying with every anti spam measure is critical though because you will be most likely sending mail to others on large servers that will reject your mail otherwise. Even then I had a lot of problems with Yahoo to get whitelisted, and Verizon just summarily blocks Digital Ocean hosts.
Secure Web Server series;
https://arstechnica.com/series/web-served/
Mail Server Series
https://arstechnica.com/information-technology/2014/02/how-t...
https://arstechnica.com/information-technology/2014/03/takin...
https://arstechnica.com/business/2014/03/taking-e-mail-back-...
https://arstechnica.com/information-technology/2014/04/takin...
You move away from a company because they are attempting "Don't be Evil", and failing in your opinion. Then you use a company that doesn't even try to rate on non-evilness and just cares about profit.
Microsoft has clearly abused their actual monopoly. They have been sued and lost for many things up to and including lying to the justice department. They are constantly being pushed back by Europe and South Korea on on bundling various things in an attempt to stifle competition. They had the Embrace, Extend, Extinguish memo where they announced all out assault on the open source community. They are patent trolling and rent seeking against Android handset makers today, right now (if they actually wanted to defend their IP they would sue google, but they want to rent seek). They put ads in local software running on peoples machines, right in the start menu. They built spyware into operating systems. They have had problems issuing rebates and paying kickbacks to squeeze other operating system out of the market. They have coerced standardization bodies. Microsoft uses security updates to force operating systems on people and stops support to convince people to move to newer versions for more money. I could go on like this for hours, but this 5 minutes of typing was enough to illustrate my point.
The worst that can be said about Google is that sometimes their things they give away for free don't work right in all the browsers, and even then they try to fix it.
This is astoundingly hypocritical.
Microsoft is down and out right now, and I'm using some of their services a bit more myself, but you need to bear in mind that if the tides change, so will Microsoft eventually.
Sidebar: For email, I recommend FastMail.
Surely they just removed two letters, and an apostrophe?