American professor does not understand English language

Q: Do you think that without regulatory capture, antitrust charges would have been brought against Google?

Oh yeah. An 88 percent market share in search advertising? That is by definition a monopoly.

Nope, it ain’t.

It’s market dominance, certainly, there’s undoubtedly market power there as well. But “mono” and “one” are rather closely connected. That they’ve not got that other 12% means they are not a monopoly.

Q: At the Stigler Center conference on concentration, you called Google “the closest thing to a natural monopoly I’ve seen in my lifetime.” Can you elaborate?

I would say Google is as close to a natural monopoly as the Bell System was in 1956. If you came to me and said “Hey, I want to start a company to compete with Google in search,” I would say you’re out of your mind and don’t waste your energy or your time or your money, there’s just no way. Classic economics would say that if there’s a business in which there are 35 percent net margins, that would attract a huge amount of new capital to capture some of that, and none of that has happened. That tells you there’s something wrong.

Bing, Duck Duck Go…….

If Snapchat could really compete on an equal basis with Facebook that would be okay, but every time Snapchat introduces some new innovation, Facebook knocks it off shortly thereafter so that they won’t have any differentiation

There’s no competition because the competition is too fierce…..

28 comments on “American professor does not understand English language

  1. Since I discovered that Bing uses real proper maps it is now my go-to for geographical searches.

  2. Had this exact argument with a lawyer friend who works on antitrust law and who thought Google should be split up. What possible “natural” barriers to entry versus Google are there? It’s pretty cheap to set up your own website/search. It’s not like there are infrastructure considerations such as railway tracks, plumping systems etc. The only way Google can stop you is by being better than you. i.e. exactly the competition we want. Just because Mr Professor cannot think of a way to compete does not mean that there is no way to compete.

  3. This happened with fucking cars, too. First Citroen introduced the disc brake, then every fucker did. It’s a disgrace!

  4. It’s pretty cheap to set up your own website/search.

    And you can even use Google’s infrastructure to do it! (Though it won’t be “cheap” once you reach any sort of scale.)

  5. The man appears to be a professor of the same academic quality as Murphy.

    Given his evident rudimentary grasp of the meaning of long words, I wonder if he knows the meaning of oxymoron as applied to the description of him as a “Media scholar”.

  6. I heard that Facebook has peaked and all the children are moving to Snapchat. So I am not sure that he is right.

    Someone else also estimated that a basic Twitter would cost about $2 million a year to run. The problem is that they want to be more than a basic Twitter. Not to mention their Orwellian ambitions.

    So someone will come along with a replacement for Facebook and Twitter pretty soon. I had great hopes for Yik Yak. A shame about that. The more political Google gets, the more it tries to sell its customers, the quicker it will die and be replaced by something else.

  7. “a natural monopoly as the Bell System was in 1956”.

    So what happened to them? Are they still a monopoly, natural or not?

    Is it me or his example actually negates his premise?

  8. That’s been going on for ages now. They’re paid, funded, by Nick Hanauer, who is entirely incompetent in economics. So, they simply will not accept any argument against the success of the Seattle minimum wage. Even to he point that the actual, city funded, study into it by the U of Washington isn’t good enough for them because they don’t agree with the conclusion.

  9. Ah… I wondered – the tone was peremptory enough to make me think they were members of Owen Jones’ North American fan club.

    Seattle and the Pacific north west in general seems to be a popular spot for American lefty progressives (Californian refugees) – many of whom in my experience like volume and vehemence even in the face of folk on their own side pointing out their errors with snippets of actual evidence…

  10. “I would say Google is as close to a natural monopoly as the Bell System was in 1956.”

    This is completely absurd. This is just political twattery.

    Even if you just go on numbers, eBay is a far bigger monopoly today than Google. There is simply no other online auction site that comes close to it. What about Microsoft in the 1990s? What was their market share? Around 95%, wasn’t it?

  11. “It’s pretty cheap to set up your own website/search.”

    Which doesn’t mean that you can replace Google, but it’s not hard to fill gaps. Google’s hard to use when you get into detailed searches or for things like events or finding data. It’s very generic. It’s better to go competing in more specific information areas.

  12. From what I can gather (teenage mumble mumble) very few teenagers are on farsebook.
    Sell signal.

  13. AT&T did indeed have a monopoly until it was busted up in 1983. Long distance calling cost went way down; local service went way up.

  14. I think I could take half of Google’s search business by the end of the year. But there is no money in it.

    The masses have been asking forever for a search engine that gives them what they ask for – and nothing else.

    I did a search for ‘regulatory capture’ on Yahoo! and got 1,170,000 results. How stupid is that?

  15. @ Tim,
    There are different definitions of “monopoly” (apart from the board game). If the Monopolies Commission wanted to interfere a 40% UK market share was enough so it was possible to have two companies vigorously competing against each that were both classified as monopolies despite the existence of some smaller competitors. This is memorable because in the 1970s Redland and Marley each simultaneously had a “monopoly” in concrete roofing tiles.
    Bureaucrats copy Humpty-Dumpty by redefining words to make them say what they want.

  16. Investopedia has “In business terms, a monopoly refers to a sector or industry dominated by one corporation, firm or entity…a single company or group an enterprise becomes big enough to own all or nearly all of the market…for a particular type of product or service.

    The American Professor understands the English language as it is used. It’s silly* to suppose that the meaning of a word has to match its etymological origins exactly.

    *original meaning “happy”

  17. IIRC it was illegal to compete with Bell, which is why they had a monopoly (your country may differ).

  18. SJW,

    So you’ve found a loose-ish definition. An economics professor should know better than that though.

    Why do we worry about monopolies? Because an exercise of monopoly power is to the detriment of consumers. IF, and only IF, a monopolist can raise prices above what the market would normally bear, then you have a problem.

    But this is only a problem if your monopolist has not just a monopoly, but an _uncontestable_ monopoly. Having 100% market share, vanishingly rare enough as it is, is not enough – if there is a threat that competitors will come in as soon as you raise prices, you can’t actually do so.

    This is standard stuff. To the point that I would say your investopedia definition is either not useful or actually wrong or both on most counts.

  19. The Other Bloke in Italy,

    The next big thing looks like being Mastodon. Already at 600K users and growing. Decentralised social networking, so anyone can set up a Mastodon server, but you can also connect with people on other servers. It’s growing at a huge rate. If it catches, you can probably kiss goodbye to Twitter in a matter of months.

  20. “The Band, which I worked for for quite a few years, were not superstars. They were middle class musicians. They made a decent living. Not a great living, but each one of them could clear $100,000 a year, which isn’t possible now. If monopolists end up with most of the money, everyone else is just looking for crumbs to fall down.”

    Hahaha. $100K a year in 1968 (when The Band were playing) wasn’t “middle class”. You were farking rich if you were making that. That was 20 times the average income in the USA. Today, that’s like making $1.6 million.

    And here’s the thing, it doesn’t end up with the monopolists. Google don’t make a profit off YouTube. It’s going to the artists. The difference today is that there’s a lot more artists because almost anyone has access to it. A few record labels and radio stations don’t have a cartel with payola and play a tiny number of artists who become rich and famous. Lots of people make some beer money.

  21. About to read that article, Timmy.

    I do wish they’d turn off the bloody music on the top-left adverts.

  22. I myself have the computer sound turned off all day for exactly that reason (well, there are a few other sites as annoying too).

  23. “a single company or group an enterprise becomes big enough to own all or nearly all of the market”: that makes no sense. How can one “own” a market? (Except in the sense of owning Billingsgate or that sort of thing.)

  24. Even if you just go on numbers, eBay is a far bigger monopoly today than Google. There is simply no other online auction site that comes close to it.

    Internationally, no. In actual particular markets, there are.

    TradeMe is totally dominant in NZ. Alibaba is in China, I believe. Searches indicate to me that locals out-compete eBay in most markets. eBay has a near cross-border monopoly, but that doesn’t mean it isn’t competing in each market.

    Nor is eBay dominant in every area in the US. Real Estate, for example, it is not yet dominant. I bought my house off an auction site 12 years ago, yet most properties still move through agents.

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