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September 19, 2008

Is Google A Search Monopoly?

by Anthony Verre

Redefining What Search Engine Monopoly Means:

According to Search Engine Roundtable, Google now owns a monstrous 70+% share of the entire search market. (Image is courtesy of Hitwise

The question whether or not Google is a monopoly is a sound one. And, inherently, the answer I can come up with is, “yes” it is a monopoly, based on the proof the Hitwise image provides (see above). Google has been steadily drowning the competition for over two years, each year pushing them (Yahoo, Live, and Ask) further in the undertow. But are they are true monopoly?

The definitions of monopoly are as follows:

  • “Exclusive control by one group of the means of producing or selling a commodity or service”
    • “A market containing a single firm”
    • Investment Dictionary: “A situation in which a single company or group owns all or nearly all of the market for a given type of product or service. By definition, monopoly is characterized by an absence of competition – which often results in high prices and inferior products.”

    It’s the last definition that gives me pause. Based on this definition, one could go either way on the monopoly vote. And, based on the last definition, my answer changes. I don’t think Google has a monopoly, just a better products and services that a populous prefers. They’ve revolutionized search and the clarity of search. Google has competition in the market (albeit poor competition in the populous’ eyes). Moreover, this competition produces inferior products and services.

    So, if others will continue to insist that Google is a monopoly, then we will have to redefine monopoly for the Digital Age. Something to the effect of:

    “Dominant market control in an individual industry, made up of several sub-industries, in which market competition produces inferior, under-caliber products and services.”

    There are, as I see it, only three possibilities from here and monopoly-hood:

    1. Google continues on its current path. And, by 2010, will have effectively crushed all their competition, owning over 90+% of the search market share. Read this as: Google Officially Becomes A Monopoly
    2. Yahoo does eventually, team up with MSN/Live (MicroHoo). This partnership creates enough innovation within search and its sub-industries to cause a slight reverse in trends. Google will still own 50+% of the search market share.
    3. A new search engine firm will emerge and help create destabilization within the search market. (The most unlikely of the three)

    Personally, I’m rooting for the second or third option, because, frankly, it’ll make my life pretty boring if all I have to do is think: WWGD (What Would Google Do). I’m not saying that Google is/will become Skynet or the Matrix, but it could happen. Anything we can do to help shake up the market is a good thing.

    UPDATE: 10/08/08: Googleopoly

    Check out this post by Rusty Brick (a.ka. Barry) posted on SE Roundtable.  More great information about whether Google is truly a monopoly or not.

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