Burak Ozdemir ’s Blog » Blog Archive » Silent growth in Google’s monolopy

Google has alleged that Microsoft’s Windows Vista’s desktop searching is virtually impossible to be turned off and thus it adversely affects non Microsoft search index program’s capability. Microsoft has denied the allegation. The outcome of the case is awaited. The moot question here is if a business giant like Google is not entirely free from evil effects Microsoft’s monopoly, what would be the fate of small businesses?

The real protest is not against the quality of the product, but rather how it behaves. The problems with monopolistic approach of these companies gets compounded when they are able to rig the laws with impunity.

Accusations against Microsoft run thick and fast as in last few decades it has killed other operating systems and internet browsers as Firefox, Safari, MacOS. It is true, anti trust laws exist to help out of monopolistic practices of these companies, but rarely have been such laws actually been able to eradicate the root of the problem. These laws have not been able to put an end to Microsoft supremacy in browser wars.

Google’s acquisition of DoubleClick in a $3 billion deal has made it abundantly clear its intention to take near total control in online advertising market. Is Google not becoming overly dominant? Already people have begun to distrust Google for the way it would handle near monopoly in the online advertising market.

Would Google become a monopolist in the online search and advertisement market and kill the competition, which is foundation of any healthy economy?

Monopolies occur where a supplier comes up with a superior product for which there is a great demand but no matching alternative. Most economists agree that the markets should be left entirely on its own, and where monopolies form, it happens due to superiority of the product and it should not be meddled with.

To be fair to both Microsoft and Google, monopoly is not a dirty word, as it is often made out to be. It is the result of one efficient business throwing out other inefficient businesses. Monopoly was much hated term in early 1900s, when it created adverse effects in the economy and was partly help responsible for great depression. Today Microsoft and Google are not only monopolies. Present day some monopolies as the NFL with American football, DeBeers in world’s diamond markets, rule the markets yet no outcry has been heard against them.

Google and Microsoft are not monopolist, but customers are simply unwilling to choose the substitute products. After all there are other operating systems and search engines. There is nothing in the market stopping anybody selling his own OS or search engine. If Google can deliver search results or provide reliable adwords program to a small advertiser better than any body else, it is not its fault. Google, until recently was a SME.

Such large corporations also contribute to making a healthy society and economy. Most small businesses are too small to pay decent salary. You would rarely see a small eatery employee leading a good life, but employment with Microsoft or Google could be any body’s envy.

On the other hand, a small business may not be able to pay a hefty salary, yet put together small businesses form 95% of the employment. The problem arises when a business acquires the status of most favored product and then misuses the position. The real protest is not against the quality of the product, but rather how it behaves. It is just like a broadband service provider makes it difficult to access Gmail and easier to access Yahoo Mail. Microsoft’s monopoly over operating system has already begun to hurt across the world. Each Windows upgrade calls for expensive upgrade to computer hardware as well.

Quite often, a manufacturer would ask for a higher price for computer without windows operating system as it may have to re-jig the components, thus Microsoft’s monopoly is harming other companies.

The problems with monopolistic approach of these companies gets compounded when they are able to rig the laws with impunity.

Summing up, monopoly, whether of Google or Microsoft, is not bad, till it impedes the entry of new businesses in it. Eventually in free market, any product or service that does not take care of its customer is bound to meet it nemesis.

The real solution lies in creating a balanced marketplace place that lets industries and society grow in harmony.

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