Some would say that Google has a monopoly on the search engine market with over 2/3 of all search traffic. Microsoft’s Bing is a distant number two with less than 1/5 of the search engine market. Is Google a monopoly that needs to be busted up like AT&T or Standard Oil for the good of the consumer? I would say NO because Google does not make its money from searches, but rather from ads. The global ad market for 2015 is estimated to be worth about six hundred billion dollars and Google’s share will be about 60 billion, only 1/10 of the ad market and nowhere near a monopoly.
The game Monopoly, a game I loved to play as a kid, is unfortunately not built on reality because it is based on a fixed-sized pie. There were only some many properties on the board and once they are bought up that is it. In the real world, the pie is forever expanding.
JD Rockefeller created a new category in kerosene and later in gasoline that was not really there before. By growing the pie, Rockefeller wisely was able to capture value through higher margins and accumulate capital. With the high margins of Standard Oil, Rockefeller was able to drive innovation to continue to grow, making it difficult for new entrants to compete.
Many of Amazon’s rivals, such as Barnes & Nobel, complained that Amazon is a virtual monopoly and demanded government action. Like Google, Amazon’s market share of both e-book and printed books adds up to 2/3 of all books sales. However, Amazon argues they are not a bookstore like Barnes & Nobel, but they are a book broker, empowering others to sell books.
