Let no good deed go unpunished

The post prior to this highlighted research by our teams that supported the claims of Google and Yahoo within the narrow confines of their arrangement as announced.

It appears necessary to clarify that this does not represent support for the deal. It remains my firm view that regulation of some kind is required to constrain the activities of any de facto monopoly regardless of how that monopoly was created, regardless of the pricing mechanism of the market and regardless of the prior citizenship record of the monopolist. As part of this my belief is that it would be appropriate for this deal to be blocked or constrained in order to increase the chance of competition being preserved.

The barriers to entry in this market are immense and operate at three levels:

  1. The capital expenditure required to assemble an infrastructure and systems that can deliver relevant results from across the web in an instant
  2. The consumer marketing required to create trial and build share in an entenched market
  3. The trade marketing required to build a pool of advertisers large enough to capture the value of the resulting queries

In here lies the root of the disappointment that the consumer proposition of Yahoo was never combined with the funding and infrastructure of Microsoft to build a second power house in the market that could have created value for consumers and advertisers.

1 Comment

Filed under The world we work in

One response to “Let no good deed go unpunished

  1. Rob,
    From your words to Carl Icahn’s ears!!
    Cheers,
    Paul

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