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Comment by nickff | Hacker News Reader

I am not sure that web search is a monopolistic market, though it seems that Google is the dominant player. Google itself wasn't the first player, and managed to capture a large market share from established incumbents. Why do you think that competitors couldn't quickly capture the market? You seem to think this is an obvious fact, but I don't see why, as switching costs are very low.

It seems to me that the important market is online ads (which is where other companies focus), and that Google is the only company willing to invest in web search.

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Building a web index and search service to compete with Google requires huge capital expenditures and going up against a network effect that Google exerts on the market (often by paying other companies to be the default). The only company to marginally succeed is Microsoft, and virtually every other search service uses Bing's index on their backend. The cost of switching is low but the barriers to participating meaningfully in the market are high.

How is search a network effects business? It seems to me that each additional user would contribute less than the previous one, as opposed to Metcalfe's law (where each additional user adds more value than the last). How would paying to be a default be a network effect? Perhaps the capital cost to competing with Google is high, but if it were worth it, there are a number of firms which could afford it; it seems like it's just not worth it.

Maybe network effect isn't the right way to describe it but clearly Google has a ton of inertia here since their company is literally the verb for search.

I agree that Google has a lot of inertia in both search and search advertising. That still doesn’t answer why there aren’t more well-capitalized companies trying to win the search market. I suspect (but am not sure that) the answer is the market is more visible than it is worthwhile (somewhat akin to media and entertainment businesses).

You can determine if a search result is effective for that query if a user stops searching after clicking the link. But only if you have enough users for any given query.

Also ad networks

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