Are Facebook and Google monopolizing the Internet. Will smaller media websites be able to survive as Google and Facebook continue to expand their reach and power on the Internet?
http://www.nytimes.com/2016/04/18/business/media-websites-battle-falteringad-revenue-and-traffic.html?ref=business&_r=0
It seems bad that Facebook and Google are dominating the Internet and I think it already reached the stage where any other venture capital firm wouldn't be able to really survive. But my question is, can there be anything to be done about their "monopoly"?
ReplyDeleteIt's not like Facebook or Google is eating up the market share by acquiring the small firms, nor either of them trying to control the media with certain agenda or with certain political side. Simply, people(at least our generation) love FB and Google so much that advertisers just have to spend their most of money on those two.
The Internet industry is unique in that it is still relatively new with extremely fast growing business and I think there should be more study to be done.
I find this idea really interesting because you don't really think of Google or Facebook as being a monopoly, however in a sense they are. Other, smaller websites cannot come into the market and compete with these two because they are so widely used. Now, in relation to Facebook, there are other social media sights that have come into play but are very different when it comes to advertising. I do think that Google will most likely continue to dominate for a while. However, with Facebook, I think advertising will change depending on the change in preference in social media, which could change drastically over the years. So, in my opinion, advertising will go with the flow and always change.
DeleteFacebook and Google also monopolize the content that we see. UC Davis spent over $150,000 trying to cover up an incident from 2011 where students were wrongly pepper sprayed. Both Facebook and Google have tools that allow paying users to essentially assign the relevance of certain articles based on search terms. Competition in the internet news market is very important to ensure that a diverse array of stories and viewpoints are readily accessible.
ReplyDeleteI think there is definitely a natural monopoly component to social media websites. You don't want to be on Facebook if you're the only one of your friends on it. I think to some extent they are increasing market share by buying up competitors (think instagram and whatsapp) but mostly this natural monopoly is holding it in place. That being said, it's a fleeting natural monopoly because if kids start to get interested in a different site all the sudden they could lose an entire generation. This has started to happen now with a shrinking number of teenage Facebook users (simply because all of its users are getting older, not because people are leaving Facebook). If they are unable to recapture the market they could lose their natural monopoly.
ReplyDeleteSpencer, this is a really interesting point. It's hard to prevent a monopoly in such a unique market as this. Facebook and Google are just so popular that it only makes sense that they take care of such a vast majority of internet advertising. In Google's case, I'm not sure if they will ever lose their share in the online advertising market, since Google facilitates advertisements on all sites, in addition to their own. The majority of the company's revenue comes from advertising alone. Only time will tell with Facebook, though. It will all depend on whether or not another company pops up to steal the users away.
DeleteI also agree with Spencer that both Google and Facebook create natural barriers of entry into social media market. There are smaller social media websites, but they are not as influential as Google or Facebook. The French broadcasting regulators ruled that TV and radio show hosts must not mention the words 'Facebook' or 'Twitter' unless it's in direct relation to a specific news story. I don't think this ban would be effective to stop natural monopoly, but hopefully this could benefit other smaller social media websites.
ReplyDeletehttp://thenextweb.com/insider/2011/10/02/facebook-twitter-itunes-and-google-the-rise-of-digital-monopolies/#gref