Posted on 05/11/2007 12:34:58 PM PDT by my_pointy_head_is_sharp
It was striking that Yahoo said this week that it'll be closing its online auction service a month from now -- striking because the Sunnyvale Internet giant is essentially admitting it will never be able to compete with San Jose's eBay and is instead resigned to being its business partner.
People talk all the time about consolidation in industries and how this can be bad for consumers. The same dynamic is playing itself out online, only at a much faster pace.
"In a sense, you're looking at the Wal-Martization of the Web," said Rob Enderle, a Silicon Valley technology analyst. "Once a company becomes successful at a particular area of the Web, it can build audience very quickly. And once it builds that audience, it can leverage it in other areas."
EBay, Amazon.com, Google -- these are the new Wal-Marts. They're online superstores (or supersites) that have so much clout, it's virtually impossible to go toe-to-toe with them.
And given just a bit more time, the same may apply to the likes of social-networking hotspot MySpace, Apple's iTunes and online DVD rental heavyweight Netflix. Each will be so strong in its particular area that it will effectively own the turf.
This is all happening so fast, Internet users might not be fully aware of how much power is being amassed by relatively few players. Wal-Mart, for example, was founded in 1962 and took decades to become the economic juggernaut that today literally defines retail trends worldwide.
Google has been around less than 10 years. Yet for many people, it now is the Internet.
That can change, though.
(Excerpt) Read more at sfgate.com ...
Really interesting article.
With virtually 100% capital cost and virtually 0% marginal costs, effective monopoly is natural.
Which only lasts until the game is completely changed by another disruptive technology. So don’t get all caught up in the monopolist of the minute.
Yahoo used to be the Wal-Mart of searching, and it was displaced by the young start-up Google.
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