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How Is Google A Monopoly

Google dominates the search engine market with over 90% market share. While it presents itself as a multifaceted tech company, a large portion of its revenue comes from search engine advertising, where it has a monopoly in the U.S. market. As an advertising company, Google benefits from economies of scale, proprietary search algorithms, strong network effects, and a powerful brand - all characteristics that reinforce its monopoly status. However, framing itself as just another tech company allows Google to avoid scrutiny as a potential monopolist.

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Poorvi Sidana
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87 views7 pages

How Is Google A Monopoly

Google dominates the search engine market with over 90% market share. While it presents itself as a multifaceted tech company, a large portion of its revenue comes from search engine advertising, where it has a monopoly in the U.S. market. As an advertising company, Google benefits from economies of scale, proprietary search algorithms, strong network effects, and a powerful brand - all characteristics that reinforce its monopoly status. However, framing itself as just another tech company allows Google to avoid scrutiny as a potential monopolist.

Uploaded by

Poorvi Sidana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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How is

Google a
monopoly?
Monopoly in what?

• Google is primarily a search engine. With more than 90% market share in 2020, Google
dominates the search engine market.
• But suppose we say that Google is primarily an advertising company. That changes things.
Google has monopolised U.S. search engine advertising but in the global advertising market,
Google looks like a small player in a competitive world.
• In addition to its search engine, Google makes dozens of other software products, robotic cars,
android phones and wearable computers. It can be framed as a multifaceted tech company. But
a large portion of Google’s revenue comes from advertising, and its consumer tech products are
a mere fraction of that.
• Monopolists lie to protect themselves from being audited, scrutinized and attacked. For Google,
framing itself as just another tech company allows it to escape all sorts of unwanted attention.
Some common characteristics of a
monopoly
 Proprietary Technology
 Economies of Scale
 Network Effects
 Branding
Proprietary Technology
• Proprietary technology is the most substantive advantage a company can have
because it makes your product difficult or impossible to replicate. Google’s
search algorithms, for example, return results better than anyone else’s.
• As a rule of thumb, proprietary technology must be at least 10 times better
than its closest substitute in some important dimension to lead to a real
monopolistic advantage.
• The clearest way to make 10x improvement is to invest in something completely
new or you can radically improve a solution.
Economies of Scale
• A monopoly business gets stronger as it gets bigger. The fixed cost of creating a
product (engineering, management, office, space) can be spread out over ever
greater quantities of sales.
• Tech companies can enjoy especially dramatic economies of scale because the
marginal cost of producing another copy of the product is close to zero.
• Google has many users today. It doesn’t need to add too many customized
features in order to acquire more, and there’s no inherent reason why it should
ever stop growing.
Network Effects
• Network effects make a product more useful as more people use it. For
example, if all your friends are on Instagram, it makes sense for you to join
Instagram, too. Unilaterally choosing a different social network would only
make you an eccentric.
• The same is true for Google’s search engine.
• Network effects can be powerful, but you’ll never reap them unless your
product is valuable to its very first users when the network is necessarily small.
Branding
• A company has a monopoly on its own brand by definition, so creating a strong
brand is a powerful way to claim a monopoly.
• Google’s mission is to organize the world’s information and make it universally
accessible and useful.
• Google “remixes” its own logo instead of changing it. Google’s logo is associated
with online stability and reliable internet. It has found ways to play around with
it. They do various versions of the same to commemorate special events. They
also have ‘Doodle4Google’ project which invites people to create their own
versions of the logo.

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