What Percent Makes A Monopoly?

Search share numbers unequal

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Let’s leave Microsoft out of this and just assume their antitrust complaints to Congress are self-servingly suspect and hypocritical—after all, Yahoo acquisition timing aside, how does a company that has controlled the computer and browser market for decades suddenly earn sympathy when they can’t compete in another market?

So forget’em and let’s ask another question. At what point does Google really gain a monopoly or near complete control of the search advertising business. One could argue they already do, and already did 20 percent ago. The numbers that frothing-at-the-mouth competitors want to use are kind of bendy in actuality.

They that shall not be named probably have their own numbers, as do Google and Yahoo. Whose numbers you go with can make a lot difference. Consider Hitwise’s search share numbers for June 2008:

Google: 69.17%
Yahoo: 19.62%

Google sending search ads across Yahoo’s network gives Google a reach of close to 90%, equal to the market share a certain software company enjoyed until Apple got its stuff together and Firefox came along—ah, a newcomer to the previously impenetrable market; we’ll come back to that. Google’s main objection is that they don’t run Yahoo’s search, just the ads, which is a pretty weak argument, in general.

Efficient Frontier’s recent report doesn’t help Google’s anti-antitrust case, either. According to a survey of EF clients, Google grabs $1.10 for every new dollar spent. That means Yahoo and MSN are losing out of pocket, and losing to Google.

In terms of trending, that could go on a while. Just as Google inched its way up the search market, it could inch more and more customers away from Yahoo and You Know Who. After a while—but probably not yet—Google could easily set the price, of search advertising, and set it high. 

But Comscore’s search numbers don’t look quite as threatening. Their metrics have Google at under 62% share, which becomes 82% with Yahoo added. Nielsen//Netrating’s numbers make an antitrust complaint look downright laughable: Google at 59%, Yahoo at 16.6%, Mr. Softy at 14%, indicating he’s actually grown significantly in this "anticompetitive" market.

And with both of these sets of numbers, Google and Yahoo’s combined share is equal to or less than the Beast of Redmond’s in the browser and OS markets.

Compete.com has Google and Yahoo neck and neck in terms of visitors last month, with 135 and 132 million respectively. The Other gets 77 million. AOL, which The Other seems to also be shopping for, grabs 55 million. Imagine a combination of all three: that’s a reach of 270 million Internet users, which is like, what, nearly all of them? Save for the third reserved for Google, the reverse of the current situation.

Ninety percent is hard to make a monopoly out of, even less so when speaking of Internet companies where barriers to entry are relatively low for competitors. How much of the online auction market do you think eBay controls? How much of the online payment market?

It’s hard to say much to eBay, or any other company with a tight grip in their niche because there are so many niches built every day, niches built for the express purpose of taking down the big guy. This isn’t oil or steel where commodities are finite.

Here’s a phrase you don’t hear kicked around much: Revolution in Monopoly Theory. A British economist thought it up close to 25 years ago. It basically says that for monopolies in markets where there is easy entry, no regulation is needed to break them up or control them.

The one argument remaining against that is all the infrastructure and technology Google has shored up. Similar to the telecommunications industry, a newcomer couldn’t bust that easily, even if they could easily enter the market itself, because of the enormous cost involved.

Look at Powerset. And look who acquired them—somebody with pockets so deep ($60 billion last year) they can build whatever they want to compete, even buy up all other competition until search marketing is a one-on-one enterprise.

That’s called a duopoly. And we know from experience with telcos and cable that the government doesn’t really mind those so much. Mr. Softy is playing up (monopolizing) that Google fear for all its worth.      


What Percent Makes A Monopoly?
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  • Ken Jarvis

    Forget Search.

    YOU can run a Windows Based PC without Internet Explorer.

    But you can run one without Google of Yahoo.

    I am not saying they will,
    ON A Windows Based PC
    MS has access to YOUR CPuter.

    Forget Search.

    When MS wants it they will put a FIX on OUR Windows based PC that won’t let us access Y or G.

    Since Y and G are BOTH AD BASED
    Who will advertise with them?

    Y and G will die.

    LVKen7 at Gmail dot com



  • http://www.gogimon.com Search channel

    Has there ever been a company that so dominated a buisness sector like Google?

    Of course there has been! Microsoft

    and now they are crying.

    There is no real monopoly here as a monopoly is the forming of companies to destroy competiton by fixing prices etc…

    Here Google by itself became the Giant in search  thats not called a monoply its called success


  • http://www.schmoozii.com Business networking

    It’s not just the percentage that determines if the company is a monopoly, it’s the behaviour.  Google could control 100% of search and that would be fine if they are still innovative, provide a valuable service to the customers, and don’t prevent competition.  The problem would occur if Google starts creating policies that prevent other search companies from getting started.  For example, if Google creates a policy that says that if you pay for search on yahoo then you will be backlisted from Google.



  • http://www.paraibainternational.com tanzanite

    A monopoly in business is an unfair advantage, while preventing other business from being able to establish in the market. I do not believe that Google does this. They simply provide a better product and service.

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