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The Monopolies That Dominate the Internet

kdawson posted more than 3 years ago | from the meet-the-new-boss dept.

Businesses 342

Tim Wu has a piece up at the Wall Street Journal pointing out that the free-market, open Internet — "competition in its purest form" — has evolved to be dominated by monopolies. Wu argues that this is nothing new, and that each wave of information technology in the US has followed a similar pattern. "Today's Internet borders will probably change eventually, especially as new markets appear. But it's hard to avoid the conclusion that we are living in an age of large information monopolies. Could it be that the free market on the Internet actually tends toward monopolies? Could it even be that demand, of all things, is actually winnowing the online free market — that Americans, so diverse and individualistic, actually love these monopolies? ... Info-monopolies tend to be good-to-great in the short term and bad-to-terrible in the long term."

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Its not 'internet'. its 'free market'. (5, Insightful)

unity100 (970058) | more than 3 years ago | (#34217344)

free market is what tends towards monopolies eventually. because there is competition, and nothing to prevent the big players from getting bigger, unless they make a HUGE mistake, all 'free' markets only function as free for all initial chaos environments until a hierarchy and order is established. as per the below post :

http://slashdot.org/comments.pl?sid=1847700&cid=34083272 [slashdot.org]

Nope. It's the credit supply (1, Insightful)

Colin Smith (2679) | more than 3 years ago | (#34217418)

It's a feature of the supply of credit to the market. You make money by pushing your competitors out of the market and taking their business. Credit is what allows you to do that.

In addition, the fact that you have loans to pay means you are largely required by your creditors to grow.
 

Re:Nope. It's the credit supply (4, Informative)

unity100 (970058) | more than 3 years ago | (#34217460)

irrelevant. even if there was no credit, in the long run all the assets would consolidate at the hands of more successful competitors. that is even assuming they started off equally, which is never the case.

read the post i linked down in the grandparent.

Re:Nope. It's the credit supply (1)

sjames (1099) | more than 3 years ago | (#34217806)

Exactly. The reason is simple, money attracts money. It always has and always will. In the absence of a re-distribution framework, those that have lots will always be able to siphon more off from those who have little.

Put another way, an unregulated free market is intrinsically unstable. There exist a number of local minima where competition exists, but eventually it all falls into the deep well of a monopoly. This should surprise nobody, Adam Smith pointed out the need for regulation to avoid exactly that fate.

Re:Nope. It's the credit supply (1)

Z34107 (925136) | more than 3 years ago | (#34217740)

Let's look at your post:

You make money by pushing your competitors out of the market and taking their business.

You don't have to, but you certainly will make money if you accomplish all that. So far, so good.

Credit is what allows you to do that.

I don't get it. Are you the only person with credit? Do you have more credit than your competitors? Would anyone give you that much credit if you weren't already pushing your competitors out? "Having more credit" only makes a difference if you use it, which is the same as "having more debt." How does that help?

In addition, the fact that you have loans to pay means you are largely required by your creditors to grow.

Your creditors don't "largely require" you to do shit other than pay them back. You're confusing "I have a corporate charter" with "I have student loans."

Re:Nope. It's the credit supply (0)

Anonymous Coward | more than 3 years ago | (#34217864)

I don't get it. Are you the only person with credit? Do you have more credit than your competitors? Would anyone give you that much credit if you weren't already pushing your competitors out? "Having more credit" only makes a difference if you use it, which is the same as "having more debt." How does that help?

I hope you don't call yourself a capitalist. You really don't get it.

Debt is a perfectly fine thing to have, if you invest the principal in projects with a rate of return greater than the interest payments due. That's the whole point of capitalism.

Re:Nope. It's the credit supply (1)

hedwards (940851) | more than 3 years ago | (#34217918)

Credit accelerates the problem. Because it tends towards a cumulative effect. As you gain assets you have both more control over the market, enabling you to more easily service the loans, and more to put up as collateral.

You are however correct, that even without credit you would still see the same pattern, albeit much more slowly.

Re:Nope. It's the credit supply (2, Interesting)

Mr. Slippery (47854) | more than 3 years ago | (#34217880)

You make money by pushing your competitors out of the market and taking their business. Credit is what allows you to do that. In addition, the fact that you have loans to pay means you are largely required by your creditors to grow.

It's not just credit, but all forms of investment where the investor -- who is not involved in the actual production of goods and services -- supplies capital with the expectation to receive profit later. (And that profit has to be skimmed off the top of the productivity of the people who are actually doing the work, so that they can never receive the full value of their labor.)

In other word, capitalism -- which, despite the confusion its apologists like to engender, is a very different thing than free markets -- is at fault. If you get the backing of the investment class, you can push others out of the market, even if their product is superior

Re:Its not 'internet'. its 'free market'. (1)

icebike (68054) | more than 3 years ago | (#34217466)

Way to pimp your own post...

But the internet has very low barriers to entry, making it easy for small players like a couple of college kids to go big time (facebook, google, etc).

The next big thing could arrive any day. We don't know what it is because we are not there yet.

Ownership of much of the web can not be asserted by monopolies, and the bits that can become irrelevant soon enough.

That there are big players at any given point in time is no surprise, that most of the start ups fail is no surprise. Its the same for gas stations, dress shops, and Taco stands.

But yet the come, start their business, succeed or fail based on their concept, efforts, and efficiency.

As much as the Summary and TFA would like to characterize this as a US issue its nothing of the kind. Its simply economics and competition in the market place. A competition that didn't even exist in many of the places the internet reaches prior to its arrival.

Yes the big players can Game Google to push their links higher, (for a while anyway) but when the small company's happy customers (or unhappy ones) start tweeting for friending, yelping, or what-ever-is-nexting, it won't matter.

Re:Its not 'internet'. its 'free market'. (5, Insightful)

arivanov (12034) | more than 3 years ago | (#34217670)

That _WAS_ the case.

It took a couple of millions to start a let's say router company 10 years ago. Now you need 100M to just consider it.

It took a couple of millions to start a network management company 10 years ago. Now you need 30-50M.

It took a couple of millions to start an ISP 10 years ago. Now you need something on the order of a few 100M.

The "several guys in the garage making the next big thing" is the norm in any market in the beginning. HP was started in a garage. Apple was started in a garage. You cannot however start a computer company in a garage today. The Internet is quickly approaching that stage. The number of areas where there are still breakthroughs of garage companies is small and decreasing and this is normal for the development of the market.

Re:Its not 'internet'. its 'free market'. (1)

AvitarX (172628) | more than 3 years ago | (#34217742)

Except to compete with google, you need not only as good or better algorythms, as good or better other services (e-mail etc). you need as good or better database too.

Google has years of peoples habits to make itself much more profitable for an eye than the others (they place ads better). Using their decade of accumulated data they can best a new entry that is better in every way, because the new entry can't gain the traction to get the data google has. In a way this is harder than a high cost for entry, as no amount of money can acquire it.

Re:Its not 'internet'. its 'free market'. (1)

hedwards (940851) | more than 3 years ago | (#34217930)

You also have to compete with muscle memory and browser settings. Even for those that want to switch over, it takes some determination as one tends to go back to whatever it is that one was doing.

Re:Its not 'internet'. its 'free market'. (1)

unity100 (970058) | more than 3 years ago | (#34217938)

Way to pimp your own post...

yes. instead, we should type everything over and over again, for any fresh out of college, indoctrinated youngster that comes into slashdot and blabbers some 'ayn rand'.

But the internet has very low barriers to entry, making it easy for small players like a couple of college kids to go big time (facebook, google, etc).

internet HAD low barriers to entry, they are higher, and getting higher every day.

The next big thing could arrive any day. We don't know what it is because we are not there yet.

yeah, and this is the only phase where capitalism works - a new land rush. its not a stable system. it requires constant land rushes. and after every land rush, it reverts back to feudalism. so, the only ones who are enjoying the system are those on top, and the ones that can join a land rush, which are always a minority. in every land rush there are more losers than a winner.

quit living in the dream world.

Re:Its not 'internet'. its 'free market'. (5, Insightful)

Drasil (580067) | more than 3 years ago | (#34217610)

Agreed. In a dog-eat-dog world you eventually end up with one very fat dog.

'Free market' means muddled thinking (5, Insightful)

ShanghaiBill (739463) | more than 3 years ago | (#34217616)

The term "free market" is used to mean "competitive market" and is also used to mean "un-regulated market", despite the fact that few markets are both competitive and un-regulated. When someone uses the term "free market" with out clarifying which they mean, they are either confused, or they are trying to confuse you.

Re:'Free market' means muddled thinking (-1, Redundant)

Suki I (1546431) | more than 3 years ago | (#34217628)

The term "free market" is used to mean "competitive market" and is also used to mean "un-regulated market", despite the fact that few markets are both competitive and un-regulated. When someone uses the term "free market" with out clarifying which they mean, they are either confused, or they are trying to confuse you.

Exactly, just like in this article. Monopolies are preserved by government. Free markets destroy them.

Re:'Free market' means muddled thinking (4, Insightful)

timeOday (582209) | more than 3 years ago | (#34217784)

No. All unregulated markets devolve into monopolies - ultimately, political as well as economic. That's why dictatorship is the norm throughout human history.

The political innovation that made markets work so well is to counterbalance them with democracy, where the guiding principle is "one person one vote" (i.e. votes can't be traded away - the opposite of markets).

Governments are associated with monopolies when market forces overcome democratic forces within the government. Then you get illicit market activity, such as kickbacks, blackmail, and unwarranted granting of monopolies.

Re:'Free market' means muddled thinking (-1, Redundant)

Suki I (1546431) | more than 3 years ago | (#34217822)

Nope. Government preserves monopolies and free markets destroy them. Dictators help preserve monopolies, the US government preserved the telephone monopoly, etc. If the government, including dictators, stop preserving monopolies they go away.

Re:'Free market' means muddled thinking (0)

Anonymous Coward | more than 3 years ago | (#34217890)

How the hell does this work? When at any point has a free market destroyed a monopoly?I think litigation and regulation are often what contrain a monopoly into failing.. If IBM could have just crushed Microsoft with goons when they realized their contract mistake, we'd have IBM Windows. If it weasn't for legal restrictions and regulation, Microsoft would never have beaten IBM..

Oil, telephone, rail, communications, steel.. these were all broken by regulations and trust busting.

I think you know very little of history and have not really thought you statements through.

Re:'Free market' means muddled thinking (3, Insightful)

poopdeville (841677) | more than 3 years ago | (#34217892)

A market isn't functioning, let alone "free", if there is a monopoly player in it. A monopoly is a market failure, and cannot be solved by the market. This is because the market for a monopoly product is a monopoly and its consumers.

You should study economics instead of Libertarianism. The differences are vast.

Re:'Free market' means muddled thinking (2, Insightful)

next_ghost (1868792) | more than 3 years ago | (#34217812)

When a monopoly grows big enough, it becomes the effective government. No support from formal government is required. Free market alone has no means to break down huge monopolies that have reached the stage of effective government. This stage of monopoly is impervious even to ridiculous amounts of internal incompetence which could bring down earlier stages quite easily. If you disagree, please tell me just one feature of the free market that is capable of bringing monopoly in this stage down that doesn't require existence of another monopoly of similar size and explain how this feature works while interacting with said monopoly.

Re:'Free market' means muddled thinking (2, Insightful)

Suki I (1546431) | more than 3 years ago | (#34217870)

When a monopoly grows big enough, it becomes the effective government. No support from formal government is required. Free market alone has no means to break down huge monopolies that have reached the stage of effective government. This stage of monopoly is impervious even to ridiculous amounts of internal incompetence which could bring down earlier stages quite easily. If you disagree, please tell me just one feature of the free market that is capable of bringing monopoly in this stage down that doesn't require existence of another monopoly of similar size and explain how this feature works while interacting with said monopoly.

Oh PLEASE stop with this business that the 'corporations' are really the government! (Some of the) People who own them can vote in elections, the shares don't vote for politicians. In a truly free market, the government is not erecting barriers to competition. Even Standard Oil was getting competition back before they were 'broken up' (if you want to call it that) from companies out west. The phone company was ONLY a monopoly when the government made it a monopoly. If YOU want to argue, rather than lie, YOU show an example of a monopoly that survived without the government protecting it.

Re:'Free market' means muddled thinking (1)

maxwell demon (590494) | more than 3 years ago | (#34217696)

Actually, while "free market" proponents always advocate a completely unregulated market, wherever a truly unregulated market emerges it is always heavily fought against. It's also not called "free market" in that case, but "black market".

Re:Its not 'internet'. its 'free market'. (1)

Z34107 (925136) | more than 3 years ago | (#34217694)

free market is what tends towards monopolies eventually. because there is competition, and nothing to prevent the big players from getting bigger

"Free market" means the government does nothing other than police fraud. A perfectly competitive market meets these conditions. [wikipedia.org] They overlap, but you can have a "free" market without it being anywhere close to competitive.

That aside, is the internet a "free" market? It comes pretty damn close. No one government can regulate more than a corner of it, for fraud or otherwise. It's likely the closest thing to a free market we'll see.

Is it a "perfectly competitive" market? It comes close here, too. Barriers to entry? Anyone can throw up a website. Transaction costs? Cost of bandwidth. Exit costs? Turn off your modem. Perfect factor mobility? It's why the Pirate Bay hasn't been shut down. But, TFA's premise is something like this:

  • There are Big Companies on the internet.
  • Therefore, "the free market on the Internet actually tends toward monopolies". (Because we know adding on the internet makes something completely unique and different and worthy of a patent.)

Worse yet is his comparison of Facebook's "monopoly" to AT&T's up until 1984. Any college student can start another Facebook - that was actually a semester project we did in college, and it's exactly what Zukerberg did. The very same college student shut down the previous "monopoly" MySpace and wiped the floor with Google's competing offering. That suggests two things:

  1. Free market "on the internet" isn't any less competitive elsewhere.
  2. Tim Wu is an idiot. Times [no pun intended] must be hard for newspapers.

Re:Its not 'internet'. its 'free market'. (1)

next_ghost (1868792) | more than 3 years ago | (#34217876)

You're missing the point. It may very well be possible for another college student to overtake Facebook with his own project. But that just replaces one monopoly with another. At the moment, it's highly unlikely that there will be multiple social network services which compete while being compatible with each other (for example that Facebook users could add MySpace users as friends on Facebook and vice versa). THAT is the point. The Internet of today is still stuck in the "winner takes all" mentality which seriously hinders both competition and innovation.

Re:Its not 'internet'. its 'free market'. (1)

mosb1000 (710161) | more than 3 years ago | (#34217726)

Sure, but is it necessarily a bad thing? The only problem is that people tend to put too much faith in the one winner and fail to diversify. What you need to do is make sure that you are keeping an eye on these large organizations and hold them accountable for their behavior. And in order to do that, you need to keep and open mind and make sure you have other options than dependance on them. I think maybe I'd better move out to the country and buy a ranch. Get some guns and fortify it in case I need to provide my own defense. Oh great, you just turned me into a nut. Thanks for that.

Re:Its not 'internet'. its 'free market'. (1)

suomynonAyletamitlU (1618513) | more than 3 years ago | (#34217744)

If all axes were independent--if every product were judged exactly on its merits, and used only and ever for what it was intended for--big players getting bigger until they reached saturation would in fact be the ideal. But the axes aren't, they're oblique, with a lot of nuances that will drag things in the wrong direction.

Say you were the first person to invent the hammer, and it swept the market. There's no reason to suspect that, being the hammer king, your product would replace screwdrivers, belt-sanders, hacksaws, or drills. However, if in order to manufacture your first million hammers, you had to contract with a reseller of shop tools, you might make a hard sell and push it as the be-all shop tool that it definitely isn't, and they'd market it like all the world's a nail. So, for no good reason at all, the whole thing would have become incestuous, with ties to other bits of hardware that really have nothing to do with your product. Because of all the hype, most likely lawyers would get involved, especially whenever someone did something that might possibly be a knockoff, because it's nothing but a racket, and they need to nail anyone who might get in the way.

If instead you just made hammers and sold them, with no stupid third parties there making mountains into molehills into nails in order to sell hammers, then you'd (probably) be rich, and you'd probably keep making new hammers because that's just what you're awesome at, and you'd be recognized forever as the genius hammer-maker, with a TV show called "Hammertime" that everyone is compelled to stop and watch. And people who saw how easy it was would make cheaper knockoffs, but people who saw the quality of your tools would come back, and would stay interested in what you were doing next, and even if someday you're replaced as Mr. Hammer, and go retire to a life running a laundromat, it's still you, and nothing you did was wrong. That's capitalism working.

I think I may have digressed. It's like I'm hammered, which is funny because I don't drink.

What were we talking about?

It's about scale. (1)

Dan East (318230) | more than 3 years ago | (#34217834)

When it comes to the internet I think it's all about scale, not necessarily free market. For example, what scale (infrastructure, etc) is required to generate and update a searchable index of the entire WWW? Isn't the main appeal of Facebook the number of users it has?

Being big is essentially a requirement - my point is whatever entity provides these specific services must be of at least a certain size in order to function or meet a critical mass of sustainability.

Re:Its not 'internet'. its 'free market'. (0)

Anonymous Coward | more than 3 years ago | (#34217846)

Too bad that the entire mental jerkoff that this post represent is disproven as easily as pointing to the market value of Zynga compared to the market value of Electronic Arts, and the smoldering corpse of Amiga and Sega by the wayside.

The problem with presenting a theory that a) doesn't conclude in the ending of the world and b) presumes that some companies will be winners and other losers is that it doesn't allow a third-party viewer to conclude whether today's firms are either one of A) "Permanent Winners of the Dynastic Winner-Loser Process" or "Competitors But Upcoming Losers in the Winner-Loser Process". It is hence a theory that cannot be proven or disproven by observation. It can always explain away observations to prove itself true.

To demonstrate: When Microsoft was big, a proponent of this theory would have said "Microsoft is the dynastic winner of all time!". Let's say that in five years' time the mobile platform is everything and only losers have desktops. The proponent of the theory will then say: "Apple is the dynastic winner of all time and they have permanently overcome losers such as Microsoft on their way to dynastic victory". Hence although the theory predicts that a company that is a winner will continue to be a winner, it is self-proving in that it allows dynamically and retrospectively to redefine companies as either dynastic winners or dynastic losers.

In other words, if I rather proclaim: "The world functions such that in the great Land of the Free, any large company will eventually succumb to an upstart created by a clever person and willing financial backers", it would be impossible in any state of the world prove whether his or my theory was the correct one.

Re:Its not 'internet'. its 'free market'. (1)

phantomfive (622387) | more than 3 years ago | (#34217850)

nothing to prevent the big players from getting bigger,

This is a really bold statement. To back it up, I mean to really prove your point, you have to completely understand every single dynamic in the market, and how they all work, and verify that nothing prevents the big players from getting bigger.

Now, I don't claim to know every market dynamic, but I do know there are several that are working against things getting larger. One simple dynamic is the counter-culture, anti-bigness movement. We see it in Converse vs. Nike. Converse has a certain market that Nike will never be able to take; a lot of people buy Converse specifically because they don't like Nike. There's a huge market for people who hate the big guys. The x-games crew. The anti-Walmart crew. etc.

Along that same line, you have the niche guys. There are a ton of markets that are just too niche for Microsoft to enter. They just don't have the company culture to nurture some groups. Microsoft can buy up, say, Danger, but then it loses its intrinsic motivation. It becomes yet another part of Microsoft, and if it dies off, then so what. And yet there was a strong demand for a sidekick type of phone, which other people have filled.

Which leads naturally to the next point: large companies are inefficient. They are useful in some ways, they can provide huge capital and resource injections, for example, but the huge bureaucracy has a cost. Often smaller companies can do the same thing in a nimbler manner. This story happens over and over in software, where a huge company makes something that is difficult to use and install, and then some smaller startup makes something that isn't quite as good, but does everything needed and has a smaller cost. Linux would be a perfect example of that, eating the lunch of big iron servers. Ultimately open source always wins on cost, although it may take decades.

Another dynamic is that it is hard for a company to not make big mistakes over the long term.

I have no doubt if you think about it, you can find some more dynamics that are pushing to make companies smaller. You clearly have an analytical intellect, you should apply that intellect to both sides of the problem.

Re:Its not 'internet'. its 'free market'. (0)

Anonymous Coward | more than 3 years ago | (#34217878)

This is true for big players that do not embrace a competitive market; that have, as their goal, to become a monopoly. If the company supports an open, competitive market, then it breaks itself into smaller competing pieces once it's achieved market dominance.
Additionally, the establishment of an abused monopoly engenders a competitive element from outside their market niche on their market niche - say, technological change that fundamentally undermines their position.
The monopoly also promotes the establishment of another system that functions outside of their sphere of control. A barter system, say, or counterfeit copies sold through an independent distribution system. While a free market may bias, over a very long period of time, toward a monopoly, it is only in a stagnant economy that a purposeful monopoly will gain and hold its position.

money (1)

think_nix (1467471) | more than 3 years ago | (#34217364)

imho its all about the money. Look at things now compared to say 5 or even 10 years ago. Most small companies are bought up by a larger competitor, just to make sure they get there hands on whatever tech it is they are developing. Or another company is sued by another for some copyright or patent infringement just to make a buck. No real new 'big' fish are coming to light with something new cool and innovative, if so very slowly, as the big boys try to make sure they stay on top and squash that competition.

Interwhat? (1)

WrongSizeGlass (838941) | more than 3 years ago | (#34217372)

Could it be that the free market on the Internet actually tends toward monopolies?

Free markets lead to successful companies. This is the same as in any other industry. Yes, the internet makes it very easy to just 'go with the flow' and follow the leader in a specific category but new companies and new leaders emerge regularly.

Just like with every other industry, if you sit back and watch it go by you'll see companies come and go. If you want to change things you've got to participate. The next "big thing" is in someone's basement or garage or spare room right now.

Bullshit. (1)

unity100 (970058) | more than 3 years ago | (#34217402)

like what other industry ? the publishing industry ? which is dominated by approx. 4 groups ? the broadcasting ? which is dominated by 4 groups again ? music ? 4 groups ? movie ? 4 groups ? cleaner products ? even less groups ? oil ? even less ?

ironically most of the above groups in different industries are either the same, or subsidiaries of bigger holdings.

what was about that 'come and go' bullshit again ? apparently they have come, and not going anywhere.

Re:Bullshit. (0)

Anonymous Coward | more than 3 years ago | (#34217564)

All of these are high-barrier-to-entry markets where switching costs are designed into the system.

If you seriously think that internet 'monopolies' are easy to hold onto, I'll point you to a little site called "Digg".

You see, Digg *was* a successful user-driven news site, which was kinda popular. In fact, they were dominating their particular 'category' of websites. Recently they launched the newest revision of their website, which they named "Diggv4". Suffice it to say, it was designed specifically to make it easier for websites to spam it so that Kevin Rose could get more advertising money. To make a long story short, Digg recently fired a good chunk of their engineering team, the website is a ghost town, and everyone moved to Reddit.

So no, I don't think that the Internet can be as cabalized as real-world markets, because the capitalists in those markets have already figured out several plans to keep control over them.

Re:Bullshit. (1)

maxwell demon (590494) | more than 3 years ago | (#34217760)

All of these are high-barrier-to-entry markets where switching costs are designed into the system.

They weren't when they started. And you don't think you can compete with Google by using your home PC either, do you? The entry barrier tends to grow as markets mature.

And about your Digg story: Sure, if you make an utterly stupid decision, you'll lose. But that's the same in any other market. Change your newspaper in a way your readers don't like, and your readers will leave you. Of course, the publishing company will typically have several other newspapers, so it will survive anyway. But then, Google can survive a failure of a single of its services either (remember Google Video? Well, in the end, Google just bought YouTube).

Perhaps there are reasons unrelated to monpolies (4, Insightful)

whoever57 (658626) | more than 3 years ago | (#34217384)

Microsoft's Bing, launched last year by a giant with $40 billion in cash on hand, has captured a mere 3.25% of query volume

Apparently, according to the author, MS's failure in search is purely down to Google's monopoly and completely unrelated to the fact that MS has in the past chosen to skew search results and hence proven itself to be an untrustworthy search provider? The "$40B cash on hand" number is meaningless, because MS hasn't chosen to spend $40B on entering the search market. Perhaps the difference is simply that Google has been able to develop and maintain a better product?

Re:Perhaps there are reasons unrelated to monpolie (1)

coaxial (28297) | more than 3 years ago | (#34217480)

Apparently, according to the author, MS's failure in search is purely down to Google's monopoly and completely unrelated to the fact that MS has in the past chosen to skew search results and hence proven itself to be an untrustworthy search provider?

Citation needed. You're the first I have heard to make such an allegation. They only honest way to determine search engine "trustworthiness" or any over perceived performance measure is to do the search engine taste test [fejus.com] . Three engines, one query. Choose the best result list.

I bet you'll be surprised.

Re:Perhaps there are reasons unrelated to monpolie (0)

Anonymous Coward | more than 3 years ago | (#34217526)

Citation needed.

This isn't Wikipedia. Grow up!

You're the first I have heard to make such an allegation. They only honest way to determine search engine "trustworthiness" or any over perceived performance measure is to do the search engine taste test

Apparently, you also fail at reading, since I specifically said "in the past". Anyway, I have had multiple experiences of searching for something on MS's site and found that Google gives me the best results.

Re:Perhaps there are reasons unrelated to monpolie (1)

cheekyjohnson (1873388) | more than 3 years ago | (#34217832)

"This isn't Wikipedia. Grow up!"

Exactly! Citations are only useful on Wikipedia. Who needs those silly things anywhere else?

Re:Perhaps there are reasons unrelated to monpolie (-1, Troll)

Anonymous Coward | more than 3 years ago | (#34217782)

http://slashdot.org/article.pl?sid=03/08/24/2028216 [slashdot.org] - searching for linux tells you how to switch to windows

http://slashdot.org/article.pl?sid=05/04/26/1228227 [slashdot.org] - using IIS gives you higher rankings

both from the past, about msn search. citations provided.

Re:Perhaps there are reasons unrelated to monpolie (0)

Anonymous Coward | more than 3 years ago | (#34217568)

completely unrelated to the fact that MS has in the past chosen to skew search results and hence proven itself to be an untrustworthy search provider?

Yes, because nobody cares.

How hard? (5, Insightful)

RightSaidFred99 (874576) | more than 3 years ago | (#34217388)

How hard would it be to go a week without Google? Or, to up the ante, without Facebook, Amazon, Skype, Twitter, Apple, eBay and Google?

Pretty fucking easy, actually. My God what are we becoming when people think this shit is so important?

Back in my day (well, ok, my grandfather's) we worried about important shit like steel, or oil. Hell, even telephone wire - it's physical, someone owns it, and they control it completely. Those are monopolies - you're strangled by one provider.

Facebook? Apple? Amazon? Give me a fucking break. Oh noesies, I can't go read about something cute one of some guy I barely know's brat kids did! Oh no, I have to buy a less expensive version that functions just as well of some gadget I don't need! Uh oh, I have to walk my fat ass to Target or order from one of the other billion internet stores!

Author makes common mistake of confusing a monopoly with most successful provider of something that one could, if one wanted, get from 20 other places.

Re:How hard? (2, Insightful)

catbutt (469582) | more than 3 years ago | (#34217546)

The issue has little to do with how "necessary" or "important" the service is. Ok, so you can survive without facebook, as can I. So? What does that have to do with anything?

Regardless, the difference here is that, with the internet vs. "physical things", network effects are in full play. Just as Ma Bell had a network monopoly (who's going to sign up for Joe's Phone Company when they can't call anyone because everyone else is on the Bell System?), and Microsoft had/has a certain sort of monopoly (who's going to get an alternative operating system when most of the apps they want to run are Windows-only, and who's going to write an app for that alternative operating system when most of the users are on Windows?)

How is that true with steel or oil? It's a lot harder for someone to control all steel production. Possible, I suppose, but a lot harder. Eventually, everything tends toward monopoly if you don't have antitrust law being enforced, but with "network" sorts of things (which includes things like proprietary API's), the situation is a lot more pronounced.

Re:How hard? (1)

maxwell demon (590494) | more than 3 years ago | (#34217576)

The only two I've ever use of that list are Skype and Google.
To go without Skype is easy: Just use your phone.
Google, I definitely would miss. But it's not something I couldn't live without. Indeed, I did live without it for quite some time. Indeed, I still remember when someone told me there's a new program called "xmosaic" installed on the university computers, but he can't find out what it's for; it just gives a grey window ...

Re:How hard? (1)

gutnor (872759) | more than 3 years ago | (#34217646)

Wait until the day after the day net neutrality has gone away and the only way to access the internet at a comfortable speed will be using the service of those monopolies.

In the meanwhile, once Microsoft abandon Bing - what will index the internet, apart from Google ? Internet is growing fast, and it takes colossal amount of money to index a fraction of it. And that is without Google trying to something evil about its monopoly: exclusive indexing in exchange for better ads rate (I know a few companies that would kill for that kind of deal), Google-only access through paywal, ...

Facebook, nowadays it is optional, something you do at home. However, I remember that only 10 years ago, I did not have internet at work, and I worked in IT - let's talk about that 10 years from now.

Re:How hard? (1)

Jah-Wren Ryel (80510) | more than 3 years ago | (#34217676)

How hard would it be to go a week without Google? Or, to up the ante, without Facebook, Amazon, Skype, Twitter, Apple, eBay and Google?

Pretty fucking easy, actually. My God what are we becoming when people think this shit is so important?

Some of us own or work for businesses that would not exist if it weren't for those services. Here's one example:

I know a guy who works as a consultant, he's the "guru" companies bring in when they realize that treating all of their employees like "cogs on a wheel" means they don't have any experts who understand both the minutiae and the big picture. He swears that over the last decade the kind of work he actually does has turned into excessive use of google-fu. Half the time he's looking up stuff with google and the other half of the time he's explaining it to the people who have hired him. Clearly its useful to his clients else they would not keep hiring him and he is good at it because he already has tons of domain knowledge.

Whatever the reason, his livelihood is significantly dependent on google. If he personally lost access to google, the value he provides his clients would significantly diminish. If the entire world lost access to google, there would be a significant productivity crash.

Re:How hard? (1)

RightSaidFred99 (874576) | more than 3 years ago | (#34217758)

Ahh, you think Google is the only search engine out there. How quaint.

Re:How hard? (1)

Jah-Wren Ryel (80510) | more than 3 years ago | (#34217882)

Ahh, you think Google is the only search engine out there. How quaint.

Ah, you think "steel" and "oil" only come from one company. How consistent.

Re:How hard? (2)

S77IM (1371931) | more than 3 years ago | (#34217884)

Author makes common mistake of confusing a monopoly with most successful provider of something that one could, if one wanted, get from 20 other places.

You (and many of the other posters on this thread) have missed a key point:
The value of a network is proportional to the number of people using it.

This is easiest to see in the case of sites like Facebook. Sure, you could use a competitor, but if none of your friends are on it, what would be the point? If your peeps do all their communication through Facebook, and you want to get their updates, you need to use the Facebook. It's less clear-cut with sites like Google. I mean, you could use Bing for search, or Yahoo!. But what about ads? If you want to advertise, or host ads on your site, the sheer size of Google's ad network makes it more attractive than any competitor.

This is what TFA author was getting at with his analogies to things like the telegraph networks and phone networks. Just because Facebook or Google doesn't own the actual fiber (oh wait, they are a tier 1 provider and own a ton of fiber) doesn't mean they don't have anything of value. They have the network of users -- a "critical mass" of participants that will make it hard for competitors to break into the market.

The nice thing, is that there could be a technological solution to this. Aggregation. Remember when you had like 3-4 different IM clients? Then multi-protocol clients like Trillian came out and suddenly network didn't matter any more. For ads there are already options like this. Let's just hope somebody can wrapper Facebook soon.

  -- 77IM

De facto, or de jure? (1)

Gothmolly (148874) | more than 3 years ago | (#34217396)

Google is a de facto monopoly because they're pretty awesome. Your local Telco is a de jure monopoly because they have lobbyists. Monopolies are great so long as the market remains open.

Re:De facto, or de jure? (2, Insightful)

owlnation (858981) | more than 3 years ago | (#34217536)

"Google is a de facto monopoly because they're pretty awesome."

That's not true at all.

Google is a monopoly because there is currently no better alternative. Altavista was a monopoly for exactly the same reasons, until Google came along.

Ironically in fact, 13 years on, Google is currently no better that Altavista was. Since every POS on Earth has figured out how to game Google, the number of link-farm results in the first page is becoming as overwhelming as the tag-spammed results in Altavsita once was.

The difference between a virtual monopoly and a physical one is that the price of entry in the market is much lower. Google busted Altavsita with a good idea, a few employees and cobbled together gear. Someone can do that again. It won't be another monopolistic big corp like MS to do it, because they are too bureaucratic to innovate as much as is Google now.

Google's monopoly could crash and burn in a year by the actions of a couple of guys with a good idea. And, by god, we really need that to happen. Search is currently no better than it was 10, 15, 20 years ago.

Re:De facto, or de jure? (2, Insightful)

bmo (77928) | more than 3 years ago | (#34217762)

Search is currently no better than it was 10, 15, 20 years ago.

20 years ago?

Really?

--
BMO

Re:De facto, or de jure? (3, Funny)

maxwell demon (590494) | more than 3 years ago | (#34217856)

Search is currently no better than it was 10, 15, 20 years ago.

20 years ago?

Really?

--
BMO

Yes. 20 years ago I could very easily search all existing web sites. :-)

Re:De facto, or de jure? (0)

Anonymous Coward | more than 3 years ago | (#34217538)

Almost all the monopolies got where they were because they offered a better product. It was only once they got there that they use their power to squeeze everyone else out and more importantly prevent anyone else getting a foothold.

Google, Amazon, Ebay & facebook are all at the stage where they are starting to abuse their power. Their 'do no evil' faces are beginning to chip away to reveal they're doing everything that every previous monopoly has done. They'll get broken up or stopped eventually but before then they're going to do a lot of bad shit.

Re:De facto, or de jure? (1)

postbigbang (761081) | more than 3 years ago | (#34217544)

Your Latin needs some rework.

But let's take the implication that awesomeness==monopoly. Nope. Google, while attempting world domination, has lots of great competition breathing down its neck, and has rotten product quality. Score: as awesomeness != monopoly, zero so far.

The local telco is a de legis monopoly. The jure is still out. Score, as they were voted into power (by a bribed legislature nationally, and by state across the US, and by fiat in many countries during the PTT era, we'll agree).

Monopolies invariably suck, no matter the market quality of 'open'. None are open, so the score here is zero, too.

Monopolies need to be fought. Competition breeds better price, higher quality (usually), and alternatives not present with monopolis. But the perception of monopolies also drives competition. For every Goliath, there is a David with a sling shot who's pissed off.

Re:De facto, or de jure? (1)

Thing 1 (178996) | more than 3 years ago | (#34217638)

Amusing that you ended with a biblical war-like reference, and your signature exhorts people to "teach peace".

Re:De facto, or de jure? (1)

postbigbang (761081) | more than 3 years ago | (#34217936)

I didn't say I savored that method. Rather, Sun Tzu's _Art of War_ seems the way that business is done these days, as the Darwinian Branch of capitalism rules.

Re:De facto, or de jure? (1)

Gothmolly (148874) | more than 3 years ago | (#34217704)

Actually, 'de jure' is the proper term. Google has become a verb - I think they've won on awesomeness. Do you hear people saying "I'll just Bing that" ?

The "Mona Lisa Effect" (1)

Subjective (532342) | more than 3 years ago | (#34217398)

Google and Amazon are possible because of a large crowd.
Facebook and Twitter and eBay don't work without a large existing crowd.
So you pick a site which already has a large crowd, thus creating a monopoly.

What a shocker (0, Troll)

AdmiralXyz (1378985) | more than 3 years ago | (#34217420)

In the absence of regulation, free markets always end up as monopolies. Not sometimes but always.

Wu argues that this is nothing new, and that each wave of information technology has followed the same pattern

It's not just information technology, it's technology in general since 1840. Textiles, railroads, oil, PC operating systems - they all started out as highly competitive markets then inevitably became monopolies, until the government stepped in. Why should the Internet be any different?

that Americans... actually love monopolies?

No, it's just that most of us are too stupid to realize this tendency, no matter how many times it's been demonstrated in the past. Show an American government regulation, even if it's to protect him, and he'll start shrieking about communism before you can get a word in edgewise.

Re:What a shocker (2, Insightful)

0123456 (636235) | more than 3 years ago | (#34217450)

In the absence of regulation, free markets always end up as monopolies. Not sometimes but always.

Name three.

Back in the real world, actual, real monopolies can only exist if:

a) the monopoly is more efficient than any competitor, thereby providing better service to their customers.

or:

b) the government keeps competitors out of the market.

In many cases in communications, governments built the initial infrastructure using its powers to take land from its owners at gunpoint, and then handed it over to private companies, which no new company can easily compete with since they don't have such powers. Similarly, big business loves regulation (or, at least, the 'right kind' of regulation as produced by its lobbyists and their tame politicians) as it raises the barriers of entry and keeps new competitors out of their market.

Re:What a shocker (0)

catbutt (469582) | more than 3 years ago | (#34217560)

a) the monopoly is more efficient than any competitor, thereby providing better service to their customers.

Until the competitors are out of business, and they have no reason to compete. Anyway, "more efficient" doesn't necessarily mean "better service". It could be that they are just more efficient at making profits....which tends to be the case when a company has a monopoly.

Re:What a shocker (0)

Baba Ram Dass (1033456) | more than 3 years ago | (#34217660)

The idea is that to make a higher profit, to be more efficient, one has to serve the demands of the customer to gain the business required to make a higher profit. The instances where this idea stands at odds with those in the "real world" are usually examples of sectors that are highly regulated by the government, raising the barrier to entry and preventing competition.

Take hot dogs... you might be able to make your machines more efficient at making hot dogs than the next guy, but that won't help your profit margins if your hot dogs taste like dog shit. The nasty tasting hot dog manufacturer might then use the strong arm of government to enact legislation outlawing one of his competitors' ingredients. (In the end, all hot dogs are pretty fucking unhealthy, but that point is missed by the politicians wanting to look health-conscious to their constituents.) The nasty tasting hot dog manufacturer might also push to have its brand of hot dogs be served exclusively in schools for the lunch entree on "hot dog Tuesdays".

Take out the corporatism element of government-sanctioned monopolies, and you get the best tasting AND most affordable hot dog becoming "top dog" as it were. Does "top dog" afford some luxuries not existing in the mom-and-pop businesses? Sure. But as long as the barrier to entry is low, regulation is not crippling, the market will tend toward the collective desires of the customer.

The problem is so often the collective customer is an idiot.

Re:What a shocker (0)

Anonymous Coward | more than 3 years ago | (#34217608)

Wow, you are living in some alternate world, aren't you? MS wasn't more efficient, and the government didn't keep competitors out. They became a monopoly through backroom deals and anticompetitive behavior. They were even convicted of it. So you kissed a big C) in your options there.

Re:What a shocker (1)

Daetrin (576516) | more than 3 years ago | (#34217686)

You wanted some [wikipedia.org] examples? [wikipedia.org]

And if you want to complain about the second link, note that an Oligopoly is just a point on the asymptotic slide towards a Monopoly. Gobbling up competitors becomes more difficult as they become larger and the benefits of gaining a monopoly decrease as the the number of competitors decrease, at least as long as those competitors are amenable to a little group price-fixing.

Even so, given enough time and the lack of any outside intervention, eventually oligopolies will collapse into a monopoly state. One by one each company will _eventually_ make a mistake large enough to make it a good takeover prospect, or companies will come up with good reasons to merge.

You forgot the most important (1)

Athrac (931987) | more than 3 years ago | (#34217830)

c) a company buys all the competitors

Of course you won't find perfect examples of that because we do have some regulation preventing that. But even with regulation, that's the direction we're going towards. Each year top 100 companies in the world make up a bigger and bigger part of the world economy. And the entry barriers in pretty much any business today is so high, that new competitors don't just magically appear out of nowhere.

Re:What a shocker (0)

Attila Dimedici (1036002) | more than 3 years ago | (#34217556)

It's not just information technology, it's technology in general since 1840. Textiles, railroads, oil, PC operating systems - they all started out as highly competitive markets then when the government stepped in, inevitably became monopolies,

There fixed that for you. The only thing like a monopoly that I have ever heard of that did not result from government action is Microsoft. Railroads, monopolies developed through government intervention (primarily state and local governments, but government nonetheless). Telephone, AT&T got their monopoly through intervention by the Federal Government. Our current situation with the Internet in the U.S. is a result of the Federal government passing laws to give localities the authority to grant local monopolies for cable TV.

Re:What a shocker (1)

16K Ram Pack (690082) | more than 3 years ago | (#34217816)

I'd say that eBay is pretty much a monopoly as well, and for similar reasons to Microsoft, which are network effects. If you want to auction something, you go where the buyers are. And you then become part of the problem because you get more buyers to use eBay.

Facebook and other social networks don't have the same power because you can exist on many networks.

Re:What a shocker (0)

Anonymous Coward | more than 3 years ago | (#34217594)

The history of government regulation has to include such episodes as starving millions of Russians to death, millions of Chinese and Cambodians, and yes, millions of Jews in gas chambers. Corporate monopolies, if they've killed anyone, it's not significant by comparison.

Government regulation shows up at your door with M-16s. Corporate monopolies don't.

Government is the IRS and the Postal Service. You want the Internet to look like those wonders of efficiency?

Re:What a shocker (1)

maxwell demon (590494) | more than 3 years ago | (#34217664)

Well, Government regulation can give good and bad.
In Germany, government regulation had given us a big single monopoly over any sort of communication, from letters to phone calls. OTOH new regulations have caused a great competition in the phone and internet market despite the pre-existing monopoly.
So you see, government regulation can do both good (prevent/destroy monopolies) and bad (create monopolies). It always depends on the type of regulation.

Re:What a shocker (3, Insightful)

sourcerror (1718066) | more than 3 years ago | (#34217710)

Maybe you should look up the East India Company.

Citation needed by parent poster (1)

sethstorm (512897) | more than 3 years ago | (#34217788)

N/T

Re:What a shocker (0)

Anonymous Coward | more than 3 years ago | (#34217654)

Show an American government regulation, even if it's to protect him, and he'll start shrieking about communism before you can get a word in edgewise.

Americans should be vigilant against corrupt use of government power and the promises of politicians. You have to remember that even if you have paranoid citizens shrieking about communism, you also have politicians who are ever being corrupted by the power they have, and the idea of powers they believe they can justify. Our government is founded on the very idea that men should not be trusted with power and it would serve us well to remember why.

they DO want it (0)

Anonymous Coward | more than 3 years ago | (#34217422)

> Americans, so diverse and individualistic, actually love these monopolies?

Whenever a company gets too big (Intel, Comcast, Microsoft, I'm looking at you) I start giving my money to their competitors so we don't end up getting one or two dominant companies abusing us in the future. I have only bought AMD systems for a decade now for example, and I use a local ISP and an aerial for TV reception. I'm trying hard to find a good Cortex-A9 based laptop.

But nobody else seems to agree. They all seem to prefer doing what the rest of the sheep do. If everybody else is doing it, it can't be wrong!

So I think the article is correct. Americans LOVES them some monopolies, with only a few exceptions such as myself and probably some few other people reading this. But not so many exceptions. Not enough to matter.

Re:they DO want it (1)

sznupi (719324) | more than 3 years ago | (#34217566)

The whole thing about "individualism" and being an "individual" appears to mean something different from what it sounds like - comes with an evaluation of how much (?!) of an individual you are.

The view appears to be: since we cherish the perception of how everyone has the opportunity to excel, we should honor those who do so since they are the representation of true individualism (which gives the word a whole new meaning)

It follows that those who don't excel need to recognize that and pay deference to those who do = where the "leadership" comes in, which appears to be not far off from conforming to your place in the society (say, a follower displays leadership when recognizing that he is expected to follow and then doing everything possible to please the (actual) leader - individualism and leadership as top-down hero worship)

It's crashing the economy (4, Insightful)

copponex (13876) | more than 3 years ago | (#34217454)

Our current market economy depends on finite supply, and with limited production capacity per person in order to employ people and pay them wages so they can also be consumers. As automation and robotics take over the means of production, only societies that can cope with overproduction with more socially shared resources will be able to thrive.

In other words, China and Europe will continue to eat our lunch.

Re:It's crashing the economy (0)

Anonymous Coward | more than 3 years ago | (#34217600)

i think you got the cart before the horse, but since you already mentioned politics i'll just call you a hack and be done with it.

socially shared resources worked out great for the soviet union :P
Having the government force you to share resources is just one more monopoly, same as all other monopolies.

Re:It's crashing the economy (2, Funny)

roman_mir (125474) | more than 3 years ago | (#34217814)

Excuse me? China (and to a very lesser extent Europe, you probably mean mostly Germany) are 'eating' your lunch because the gov't created monopolies destroyed competition in USA by using gov't as means to destroy free market and to get themselves all the subsidies and regulations that keep out the new startups, so then once the economy became global the monopolies could easily outsource the labor to cheaper locations.

But if the market in US was actually free and gov't didn't destroy the liberties in it: didn't take away capital through income tax, didn't impose regulations and rules that prevent businesses from starting and succeeding, didn't create the unbearable expectations of social net without actually having any way to pay for such obligations and because of that creating huge pyramid scams like SS and medicare and THEN because of these scams destroying the currency and eventually credit affordability of US private market, then US would still be producing.

Take the minimum wage as an example, it's not really hugely important but it does show the destructive force of gov't intervention into free market:

1. Minimum wage prices certain people out of market, out of jobs, out of apprenticeships.
2. Minimum wage kills certain jobs, jobs that are NOT worth paying over certain amount, over minimum wage in this case.
3. Minimum wage puts labor into competition not only with labor but also with capital, so instead of only competing with another worker, you have to compete with money that can be spent to automate the job away.

Now, certainly automation is inevitable, but it does compete with labor costs.

If a machine to wash floors by itself costs half a million dollars and a person costs 15K/year, then it doesn't make sense to buy the machine.

However if the person costs 50K/year total, then maybe it DOES make sense to look into buying the machine and amortizing it over 10 years especially if it's possible to get cheap money coming out of gov'ts wazoo.

China and the rest of productive labor in the world are an actual productive part of economy, while US and most of Europe are really not that productive at all when all regulations and rules and social obligations etc. are compared!

So obviously Asia will see economies growing and US and most of Europe will see economies shrinking and dying because they are borrowing (which by the way is a way to tax you in the future, so it's a deferred tax + interest) and they are printing (which is killing the fiat currencies very quickly and it is taxing people who are mostly invested into those currencies, so people who live paycheck to paycheck for example, and it's taxing the ENTIRE savings of those people, not just their income).

To fix this economics disaster that is happening and that is going to accelerate, the unproductive parts of the world need to do the following:

1. Get rid of income tax. It's crazy to tax productive work and it's a terrible idea from point of view of liberty first, and from point of view of giving money to the unproductive gov't second.

2. Get rid of all social obligations. Many believe they are entitled to SS money because they 'paid into it'. But what they don't realize is that dollars can only be spent once. 1 dollar can only be spent on 1 thing that costs 1 dollar. So if you pay taxes and supposedly some of them go to SS, but then SS is raided and money is used for other purposes by politicians elected by the people, then in principle the politicians are using the SS money to pay for other things that they promised to get elected, so the people already have gotten something for their dollars (even if they didn't want it, like Vietnam or Iraq wars for example) then they can't expect to get 2 things for 1 dollar they paid.

But the point is that if gov't actually cared about people's ability to save money and be set for their retirements and future, they wouldn't be taxing income, they would allow the people to invest the money into their own savings and businesses. Instead the money is taken away and spent, and now to continue paying for existing SS obligations, new people must come into the system and pay the taxes.

So it's a scam, a pyramid scam because it needs newcomers to pay for those who benefit already and if newcomers disappeared (left or lost jobs) then existing obligations wouldn't be paid.

It's wouldn't be a scam if money were saved in invested, it would be just a bad idea because I don't trust gov't with a single cent of my money. But it is a scam now, SS has no money, it's welfare, so it must be stopped and abolished, and people who cannot survive without it would have to apply to get normal welfare (which is also a problem created by gov't, who makes people poor in the first place so it can then subsidize them and also gov't always causes prices to rise, as opposed to free market, which without gov't intervention causes prices to fall and quality to rise, see 19 century, see electronics and lasic surgery in this century etc.)

3. Stop all gov't spending. Stop all wars. Stop all programs. Fire 99.99% of all gov't workers and contractors and cut 99.99% of all gov't spending and liquidate all gov't assets and start paying out the debt.

4. Stop collecting income taxes. Allow people to save and invest their money and don't pry into their private business and lives. Collect only sales taxes and refund the tax to those, who make too little money by some standard.

5. Stop all subsidies to all businesses and everybody else. No corporate welfare.

6. Stop getting involved in business completely. Stop rearranging markets, stop picking winners and losers, stop bailing out companies, stop buying companies, stop setting interest rates, stop printing money. All of this is destructive to economy and creates an entire country of dependent people, who are unable to tend for themselves, also it kills production and drives away manufacturing and production due to ever increasing costs.

---

Only return to sound economic policy, which really means: free market and capitalism, will grow economy, will increase quality of life, will require increase in engineering and sciences, will push people forward and make them create stuff, only this will allow progress and will cause real growth.

It was capitalism and industrialism that raised everybody's quality of life by getting people away from farming, by allowing 5% of population to feed 100% of people and allowed many fold increase of population throughout the world in a very short time frame, pushed forward innovation and science, actually improved conditions for everybody in real terms - liberties of women, children, minorities, all of these things are only possible because capitalism and industrialization allowed people to stop being subsistence farmers.

Of-course there were questions then: what will all these people will do now, that they are not farming? Well the free market answered that question.

Now again, the question is the same: with all the automation and innovation, what will the people do?

Well again, it's not going to be answered by any gov't intervention. Gov't intervention will lead to dictatorial power rising and destruction of economies and to wars.

Only free market answers these questions in a meaningful productive manner.

---

As to monopolies on the Internet. Yes, monopolies rise to power in cycles. As long as they provide services that people want and need at price and quality that people are really satisfied with, these monopolies will exist and will not really hurt anybody by existing, except the competition, who will find it very difficult to justify existence.

BUT gov't should not be getting involved, like it got involved with Alcoa Aluminum, a company that was providing the world with cheap aluminum that the world wanted. Others found it difficult to compete honestly, so they got gov't involved to stop the monopoly.

But monopoly is not a problem if it does provide market with good and cheap product. If it does NOT provide market with good and cheap product, then eventually competition rises.

This was the case with Altavista, Lycoos, Infoseek, some other crappy search engines, and then came Google and won because it was a very good competitor.

Also don't flatter yourself, in most other world Google is not as huge as in North America. Also Facebook is not the first in that space either, with Livejournal and many other former classmate sites, etc., then remember the IRCs and BBSs? Facebook is a fancy BBS of the late eighties early nineties.

Re:It's crashing the economy (0)

Anonymous Coward | more than 3 years ago | (#34217922)

No minimum wage? No income tax?

Thanks for sharing your recipe for hell.

More sensationalist meaningless drivel (2, Insightful)

siddesu (698447) | more than 3 years ago | (#34217462)

This article is full of sensationalist bullshit.

Facebook, Amazon, Skype, Twitter, Apple, eBay and Google

Yes, one can do comfortably without all these. I don't shop at Amazon, instead, I shop at several other places, which vigorously compete with Amazon.

I've never used online auction site, and still manage to buy shit online cheaply.

I check my facebook account once a week if that, and I still manage.

I switch between several search engines, and I think they've gone more or less on par.

Twitter and Apple? Monopolies? Lolwut.

It seems the author isn't very well versed in economics and uses words like "monopoly" and "free market" colloquially.

Also, he has his bearings wrong. The only thing that allows any kind of "monopoly" in information is the government and its fucked up system of copyright and related rights, which is being tended by lawyers who are probably students of the author in the quagmire of "Intellectual property". Now, this is the REAL danger, but he somehow misses it altogether.

Not impressive at all.

Maybe the professor should concentrate on his studies in law, and not venture with superficial sensationalism in areas he doesn't know much about -- like economics -- before learning the basics.

Re:More sensationalist meaningless drivel (1)

Mikeikon (1917356) | more than 3 years ago | (#34217574)

Seriously, how did this even make it to Slashdot? Idiotic.

Pretty Good Article About the Network Effect (1)

SashaMan (263632) | more than 3 years ago | (#34217490)

Surprise surprise - capitalism on the internet is largely about companies dominated by the network effect. It is interesting, though, that while many folks thought the internet would lead to a broader spectrum of companies given that start up/fixed costs are so low, the network effect has tended to consolidate power to a very small number of winners.

I think the overall effect on capitalism itself will be very interesting. Capitalism was always about winners and losers, but previously you could have a lot more winners given that there were a lot more markets. The internet is connecting all these markets, making space for fewer (albeit much bigger) winners. We talk a lot about the rise in income inequality in the US over the past few decades, and I think it has as much to do with technology as with any policy changes. Technology fundamentally makes things more efficient and breaks down market barriers - in many ways this is a great thing, but I think people are just now starting to realize how it has broad negative effects given the way our brand of capitalism works.

pass go (1)

binaryseraph (955557) | more than 3 years ago | (#34217548)

Well as long as I get to play as the thimble or hat, I have no complaints.

Flawed premise (1)

Sheik Yerbouti (96423) | more than 3 years ago | (#34217550)

This whole premise is flawed a true monopoly of information in the traditional sense is not really happening on the Internet as far as I can tell. Sure the vast majority of people see Facebook as the Ineternet and spend entirely too much time on there posting inane updates, doing inane quizzes and playing terrible web games. However that does not stop Slashdot, Reddit or Penny Arcade or xckcd or hack a day or cnczone from existng and doing just fine for people that want or have a thought rattling around between their ears. The cost of entry is not high in fact with tech like Amazon ec2 it's stupid low at this point. Anyone can start a web site and make money it's just most people suck at it (me included).

Re:Flawed premise (0)

Anonymous Coward | more than 3 years ago | (#34217838)

Exactly. Making money on the internet is easy and most people find it hard to do.

Google (0)

Anonymous Coward | more than 3 years ago | (#34217572)

"Google is a de facto monopoly because they're pretty awesome." decisively true...
dubbing [nanokarrin.com]

So diverse and individualistic, actually love the (0)

Anonymous Coward | more than 3 years ago | (#34217590)

As long our CHOICE to search on Google or post on Facebook or whatever is what is creating these so-called monopolies, we have no problem with them.

Re:So diverse and individualistic, actually love t (1)

StripedCow (776465) | more than 3 years ago | (#34217796)

This is actually what TFA says.

I quit reading TFA at; (4, Insightful)

forgottenusername (1495209) | more than 3 years ago | (#34217596)

> Forgoing Google and Amazon is just
> inconvenient; forgoing Facebook or Twitter
> means giving up whole categories of activity.

I don't use facebook or twitter, but use google on a daily basis & amazon on a weekly basis.

Anyone that claims to not be able to live without twitter/facebook is not someone I wanna hang out with regularly. Or read what they have to say about tech :P

three words (0)

Anonymous Coward | more than 3 years ago | (#34217612)

intellectual property patents.

Well, duh! (1, Interesting)

bradley13 (1118935) | more than 3 years ago | (#34217634)

"Could it be that the free market ... actually tends toward monopolies?"

That's economics 101: economy of scale means that a pure free market tends to monopoly. Why anyone should expect the Internet to be different escapes me. The usual argument is that the role of the government in a free market economy is to provide regulation to limit this tendency: first, by preventing the abuse of the monopoly (to prevent competition, or to take over related fields), and second, by limiting the maximum size of companies, if necessary, by breaking them up.

The recent banking mess is a good illustration of the failure of modern governments. They should never allow companies to become "too big to fail". If a company has achieved such a size, the government has failed its regulatory responsibility - at the cost we all saw: hundreds of billions of dollars/euros of your tax money used to prop up companies whose mistakes should have simply bankrupted them.

Google as a monopoly (1)

bmo (77928) | more than 3 years ago | (#34217658)

Google is a monopoly as long as the alternatives suck.

Seriously.

I have yet to see Bing, Yahoo, Altavista, Webcrawler, Lycos, etc, bring their products up to speed to offer better alternatives to Google's offerings.

There is nothing stopping Microsoft making Bing a successful alternative to Google except maybe the poor algorithms they use.

Oh yeah, and where are my advanced search functions, Bing?

--
BMO

Re:Google as a monopoly (1)

StripedCow (776465) | more than 3 years ago | (#34217736)

The problem is that Bing is too much focused on the average user. What google does right is that they are appealing to techies, and this gives them all sorts of extra benefits that MS is not getting.

Not monopolies (0)

Anonymous Coward | more than 3 years ago | (#34217680)

These are not monopolies. A monopoly is a company that has complete command over a market, to the point where nothing else can possibly compete. These companies are large and dominant, but they are nowhere near being monopolies.

Let me explain the difference through some examples. If Standard Oil had decided in 1910 to start charging $1 per gallon (a fortune in those days) they could have done it. People would have had no other choice, aside from abandoning petroleum altogether. There simply was no competition in too many areas. Similarly, if Ma Bell had decided to charge $1/minute for phone service, again people would have had no choice but to pay.

In contrast, consider the so-called monopolies from this article. If Google started charging $1 per search, Google would have no more business. If Facebook started charging $1 per post, facebook would be gone. And those are in today's dollars, which are far less valuable than they were back in 1910 or even 1980. None of the companies listed have the ability to arbitrarily gouge their customers without losing their positions.

What irony that comes from Murdoch. (1)

sethstorm (512897) | more than 3 years ago | (#34217774)

Tim Wu has a piece up at the Wall Street Journal

They speak of hating monopolies, yet that's what Murdoch wants to be.

can tech help? (0)

Anonymous Coward | more than 3 years ago | (#34217792)

The question here is: can technology help reduce our reliability on monopolies? Are projects like diaspora /opensocial viable? Will monopolists be able to keep up their information walls indefinitely? And can open source help out?

big and small monopolies (1)

swell (195815) | more than 3 years ago | (#34217820)

TFA refers to big monopolies that are familiar to us all, but there are millions of small monopolies that also drive business.

The USPTO gives monopolies to businesses and individuals in the form of Patents, Trademarks and copyright.

Exclusive rights to something of value confer power to the owner. This is the core strength of all the big monopolies mentioned.

Your local shoe repair shop will never have power because it owns no IP or other exclusive rights.

Your local gas station is in the same situation except that it may have exclusive rights to the only viable corner in the neighborhood.

But your local hacker who comes up with a patentable idea could skyrocket to wealth when Google buys his idea. Or he could just sit on it and prevent anyone from using it.

Monopolies come in all shapes and sizes. They can benefit or hurt individuals, corporations, nations or consumers. This general discussion cannot lead to a simple answer about monopolies.

7% (0)

Anonymous Coward | more than 3 years ago | (#34217872)

Usa makes for about 7% of the internet users, why assume that it is your likes or dislikes that shape the darn thing

Move along, nothing to see here (0)

Anonymous Coward | more than 3 years ago | (#34217896)

Monopolies naturally form in industries that have increasing returns to scale. For example, it's hard to compete with Facebook, even if you have a better product, because initially no one has signed up for your service and therefore no one will want to (since they won't have anyone to friend or message).

Monopolies naturally form in fields based on intellectual property. For example, someone can't just copy Mac OS X and start selling it (on a large scale).

Information technology companies simply have natural barriers to competition and that is why companies can reduce supply and increase prices with impunity.

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