They’ve been sidelined, first by the web (and Google), then by Apple’s consumer devices success. Now think about what’s happened to Microsoft since then. But they can’t really do anything about a mindshare monopoly, short of taking every man, woman, and child in the developed world and subjecting them to a lengthy brainwashing procedure. The courts may order Microsoft to do things differently. Judging from recent legal proceedings in both Washingtons, it would appear that this power and this money have inspired some very peculiar executives to come out and work for Microsoft, and that Bill Gates should have administered saliva tests to some of them before issuing them Microsoft ID cards.īut this is not the sort of power that fits any normal definition of the word “monopoly,” and it’s not amenable to a legal fix. Microsoft has power because people believe it does. Here, instead, the dominance is inside the minds of people who buy software.
#Ms monopoly flops software
But in the software business, the means of production is hackers typing code, and the means of distribution is the Internet, and no one is claiming that Microsoft controls those. The old robber-baron monopolies were monopolies because they physically controlled means of production and/or distribution. Neal Stephenson wrote about this back in 1999 in his excellent essay In the Beginning was the Command Line and it remains the best way to think about this topic:īut possession of this psychological high ground is different from a monopoly in any normal sense of that word, because here the dominance has nothing to do with technical performance or price. What Google has is something far more nebulous: mindshare. And this isn’t about resources: search isn’t a physical product that can be controlled through normal monopolistic powers. Monopolies happen over the control of physical resources. Just ask Microsoft, whose example people are trotting out. Because when it comes to technology, there’s no such thing. But however you want to define it, you can’t argue that Google has any “real” monopolistic powers, even if they controlled 90% of the search market. None of the monopoly definitions that people have been throwing around are very clearly defined, which may be part of the problem when we start arguing about this stuff.
Remember - this was a company that came to dominate search with far less resources then they have now. And it’s unclear that the reason that Google has grabbed a dominant position in search has anything to do with cost and scale. And even though Google is dominant in search, they still don’t have 75% market share, though they’re not terrible far off. When it comes to the strict definition, that’s clearly not true. And than there’s a natural monopoly, which is what happens when you have increasing returns to scale and high fixed costs which preclude other entrants. The government has a complex set of rules for determining if a company is actually a monopoly under their definition, but a rule of thumb is 75% market share. government does, largely influenced by the Sherman Antitrust Act.
There’s the strict economic definition of monopoly: a market consisting of only a single player. There is no competitive model where sustainable monopoly powers are possible in the technology market.įirst things first: let’s talk about some ways to define monopolies. More importantly, it’s the wrong way to think about technology. It even has a clear narrative: the story of unfair competition, putting down the little guy, Goliath stomping all over poor tiny David before David even had a chance to grab a stone.īut people are using it wrong. It’s got that breathless hype that people and the press love. I do not think it means what you think it means.” A lot of very smart people have been saying Google has a monopoly on search and I’m reminded of Inigo Montoya’s great line: “You keep using that word.
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