I'm sorry but this is what bothers me the most about unregulated capitalism. You are discounting the massive advantage Google and other corporations have which they have accumulated over the years in the form of:
* IP and patents
* Actual employees and knowledge capital
* Actual working designs and infrastructure
* Brand recognition
* Amount of businesses that rely on them
If you say that a new startup can just start building a computer to rival the iMac, for example, you're missing the 1000 little things that go into it. Sure, your competitor might have a more open operating system, say. But it won't have the agreements with chip manufacturers. It won't have the "retina" displays, or other technology that Apple has accumulated over the years.
At some point, the giant corporations just have too much for a startup to defeat. That's why most startups are basically picking off one little part and then the corporations buy them. It used to be that NEW technology was where startups were able to expand while old players couldn't adapt fast enough. For example, Microsoft was still small when the PC software revolution came about. However, now with "moonshots" and ambitious VC activity, the corporations have set up quite a few obstacles to that happening anymore.