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0 pointssonnyblarney7y ago0 comments

There are two arguments, one is about Search as a monopoly the other is about that power as it relates to other parts of the value chain.

Google search is fundamentally better than DDG (for most purposes) because it has massive advantages that make it effectively unassailable. For example, I stopped using DDG because I rely on reverse image search. FYI DDG does not have its own crawler, it gets data from other sources. And it won't get reverse image search unless it does it itself ... which I doubt will happen. Maybe. And of course Yahoo is not a search engine either, it's not really an alternative at all.

In order to compete with Google effectively, you'd have to build your own crawler etc.. It's essentially impossible. The number of engineers, data centres other components ... my gosh man.

Consider for a moment that Google is a massive cash printing machine. Do you not think that VC's would be lining up, piling billions of dollars into competitors in order to take a piece of the action?

Why is nobody - not even intelligent actors with a lot of cash to burn - investing in the most profitable business model of our era?

Because the barriers to compete are absurdly high.

It's a monopoly.

And if it is - then we have to be very concerned about their relationship to adjacent layers of the value chain because of their ability to subsidize products to put others out of business.

So you're aware that in free trade deals between nations, part of the deal includes measures to bar state actors from participating in some economies, and also, rules against 'dumping'. This is because if a nation state actor wants to, they could subsidize their own industries, wipe out competition in other nations, and then let their industry dominate.

The same applies in value chain monopolies.

Standard Oil didn't have 'better oil' or better practices than other Oil companies - they used control and ownership of the railroads to increase prices on their competitors and put them out of business. In a truly competitive landscape, there would be no Standard Oil.

When Microsoft uses their ownership of the OS to put all other 'Office' solutions out of business, is that good for consumers?

By the way - MS is still printing money hands over fist in Office Software. They are making billions. They are a de-facto standard, arguably a monopoly there. Why aren't investors lining up to create competitive solutions? (Because it's an unassailable monopoly).

If Google decides to get into your line of business, and you are small, they will absolutely wipe you out if they want to, and it has nothing to do with having 'a better product'.

Also consider for a moment how many of Google's other business parts could stand on their own as businesses?

Google Analytics? Android? Chrome? Google Docs? Maps?

They are all all money pits, strategic investments (i.e. 'moats') by Google to ensure the dominance of Google Search.

How could a mobile OS vendor compete in a market where Google is using billions from one market, to dominate a different one, like mobile OS? They can't. Maybe in China, wherein there are non-market factors to protect their own makers.

For the same reason that governments have mostly separated the transport of electricity from electricity production, for the same reason we have net neutrality, Google Search should possibly be pared off from the other businesses.

Amazon is using massive profits from AWS to put retailers out of business. Amazon is not hugely profitable, but their AWS business unit is, ergo, the retail unit is probably losing money.

How can retailers compete against Amazon, which is effectively selling at a loss? They can't.

Consumers generally don't win when a de-facto or real monopoly in one market, uses that power to wipe out competition in others.

There is essentially no real competition in search, nobody is putting money in it. Same for office software. Given how much money is being minted in those markets, it's a sure sign of monopoly.

0 comments

AndrewKemendo7y ago

This is well written and I would add that the counterargument people are throwing up about how there are no "barriers to entry" for search etc... is a red herring. Really, it's misunderstanding what is required for entry.

As a thought experiment, lets say that three people came up with a WAY better search engine than google. Like way better. Will this new company be able to take search market share away from Google? No.

Why? Chrome is now the dominant browser with Google search built in. Google is the default search on Apple and Android Devices. Google has Billions in marketing for search.

But most importantly, Google has the best engineers on the planet and they can re-build what this crack team did, deploy it to a billion people and drain you in court if you decide to fight them.

Wouldn't you rather just sell to them and cash out instead of getting taken out?

That's how this game goes.

AnthonyMouse7y ago

> In order to compete with Google effectively, you'd have to build your own crawler etc.. It's essentially impossible. The number of engineers, data centres other components ... my gosh man.

The Internet Archive does this with an annual budget of $10M. That is clearly not a lot of money compared to the amount on the table.

> If Google decides to get into your line of business, and you are small, they will absolutely wipe you out if they want to, and it has nothing to do with having 'a better product'.

That is what happens if any multi-billion dollar company decides to get into your line of business.

> How could a mobile OS vendor compete in a market where Google is using billions from one market, to dominate a different one, like mobile OS?

This is conspicuously disproven by basically every mobile device maker around, who all maintain their own Android forks, plus Apple.

The point of Android wasn't to dominate the OS market, it was to commodify it -- which it did. But that's the opposite of anticompetitive. Now entering the OS market is trivial because you can start with Android, make zero or more changes to it and you have yourself an OS without paying Google or anyone else a dime. You don't even have to use Google search.

asdfasgasdgasdg7y ago

DDG is proof positive that the barriers to entry are extraordinarily low. It is incredibly easy to start a search engine. Now, to make one that is considered good relative to Google, that is hard, because if Google is known for one thing, it's known for executing in search. But if someone wanted to invest billions and billions of dollars, they could take a shot. Microsoft has been taking their shot for years, and so far it isn't working, but that's not because of barriers to entry. It's because they do not execute as well as Google does.

It's also hard to build a new car company, or a new chemical manufacturing conglomerate, or a new anything. That is not a defining feature of a monopoly.

kinkrtyavimoodh7y ago

DDG doesn't maintain its own indexes. It uses Bing and Yandex, the only two other global-level English language web indexes. So DDG isn't proof positive of anything.

sonnyblarneyOP7y ago

"It is incredibly easy to start a search engine"

Yes, but it's impossible to build a quality one, that will compete with Google.

"Microsoft has been taking their shot for years, and so far it isn't working, but that's not because of barriers to entry. It's because they do not execute as well as Google does."

MSFT is one of the greatest companies in the world, with tons of high tech workers, brand recognition and the like. If they can't make a dent in search, then again I hold this up as evidence of monopoly.

When there is only 1 primary player, despite everything else, then that alone is evidence of monopoly.

If VC's could spend 1 Billion and take a piece out of Google - they would in a heartbeat.

rifung7y ago

> Microsoft has been taking their shot for years, and so far it isn't working, but that's not because of barriers to entry. It's because they do not execute as well as Google does.

I think that's a little unfair to Microsoft.

Google has spent way more engineer team on all the infrastructure required to make Search great. Microsoft's main products were a desktop OS and application, so presumably their existing internal tooling probably wasn't as mature for scalable web services.

I work at Google but opinions are my won.

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