Google Leverage Monopoly
Monopoly is defined as a situation in which a single company owns all or nearly all of the market for a given type of product or service. This would happen in the case that there is a barrier to entry into the industry that allows the single company to operate without competition (for example, vast economies of scale, barriers to entry, or governmental regulation). In such an industry structure, the producer will often produce a volume that is less than the amount which would maximize social welfare.
Did you know that during the Bush administration, the Justice Department did not file a single case against a dominant firm for violating the antimonopoly law? In the middle of the internet boom, the lack of anti-trust enforcement has created a new type of monopoly which I would define as a “leverage monopoly”.
Technology and energy companies have taken full advantage of it. Leverage monopoly works differently. Due to compatibility limitations between different technologies; companies leverage their brand loyalty to move to different markets. Here are a few examples:
- Apple moved from computers to phones/music players with a monopoly over phone applications by creating a closed “open” source phone & music software/hardware monopoly.
- Google created the freemium monopoly by creating freemium tools that were interconnected to each other (analytics, email, video, calendar, maps, books, news, ecommerce payment etc). Now, Google is using their leverage from phones to create another domination point in hardware. Of course at the end of the day, they own more information about everyone than any other government in the world to create an advertising monopoly.
- Amazon.com also owns a supremacy as the cheapest online price leader. It has moved that momentum and its core business of books into the hardware sector creating a massive headstart in creating a monopoly on electronic books through Kindle.
Who can stop these type of companies if they become more powerful than any government in the world?
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Considering the emergence of Google, it is not impossible to design/produce a similar service. Because it is the use and the gathering of information that is at the core of this service, today’s resources make it possible for new parties to enter the competition. The important thing here is that how can one, a group or a company can achieve enough popularity that will be the driving force for that particular new entrant to compete with these already worldwide-known companies…
There are so many useful applications and programs on the internet that are “supplied” by unknown coders or web pages but none of their names could have entered the Oxford English Dictionary such as Google’s.
So is it the popularity that makes a cyber service grow, gain reputation and eventually at the end make money or is it the utility of it? The answer is both actually. However, while some web pages do offer highly usable features, they remain small-time players in the competition.
Innovation by itself is no more enough for anything. The key to gaining a significant market share is all about marketing what you have. How you market your idea is of course a topic deep enough to be discussed alone.
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