Thursday, June 29, 2006

Googlopoly

The question of whether Google will become the 'next Microsoft' is interesting. Bill Gates stepped down from his Microsoft post, conceding defeat to the combined efforts of Apple, Mozilla, and Google. Despite still having the majority market share in the OS and Browser business, Macs and Firefox are gaining bit by bit on a slippery slope, while it goes without saying that Google is winning the search engine race by a mile.

Microsoft is viewed as an evil monopoly and even accused of anti-competitive practices mainly because it bundled IE with its operating system, kicking Netscape out of the game. All services that Google provides is optional; alternatives exist if you choose so. On top of that, all the tools are free. Most of Google's revenue is fuelled by advertising, and to a smaller extent corporate search and Pro versions of software.


The fundamental line dividing monopolist Microsoft and Google is the company nature. Google's motto is "Don't be evil", and with their brilliant minds and philanthropic mission, the track they are on is unlikely to lead to a monopoly. The way they maximize revenue is just like any other Internet company, only much better. Provide the best products for free, attract the most internet customers, which guarantees an immense amount of advertising revenue.

Competition (if perfect) will solve problems of monopoly, eliminating inefficiencies. Google competes with many different companies on many levels: as a web portal with Yahoo, in video with YouTube, in online transactions with PayPal, in VoIP with Skype, and countless others. From the start Google has been involved in providing a smooth user experience, focusing their visionary efforts on what people really need.


By contrast, Microsoft devoted itself to maximizing sales revenue, capitivating on its dominating market share with lacklustre products. Vulnerable releases and lack of foresight signed their death contract. Justice is doing its work, and the invisible hand is pushing them out of the game unless they give the masses what they want. Otherwise, people will depend increasingly more on Google and its web services, or choose to get a Mac for its smooth, synthetic usability and quick out-of-the-box experience.

Googol means 10 to the power of 100. With Google, there is hope for a Googlopoly, tending towards what economists would call 'Perfect Competition'. Thank you Invisible Hand. Life just got better.

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