Dude, you got Chrome on my Bing

In reading Cringely’s article, Chrome vs. Bing vs. You and Me, I started to think Google and Microsoft were operating in an oligopoly relationship, but then there’s nothing in this op-ed to suggest that they’re working strategically or worried about undoing each other. In fact, I hadn’t thought, before, of the remarkably symbiotic relationship between Windows users and Google. I wonder what the value is to the bottom line of giving engineers more than 20% of their time for R&D when it will hardly impact profits at all – it’s insignificant. I just hope their standoff doesn’t adversely impact the value of our sidebar ads!

Barriers to Entry

Cringely is intuitive and foretelling. His article connects very well with this week's textbook chater.
My interest is not about whether Microsoft or Google wins. It is not about Chrome vs. Bing either. I am interested in how long Microsoft or Google can maintain its monopolistic state in respective market.

• Market structures of search engine or PC operating platform is monopoly, or may be oligopoly. Difference between monopolistic and competitive market is barriers to entry. Microsoft and Google sees each other as their sole competitor. So they set up barriers with Chrome and Bing. It is a balance of terror. According to Cringely, Chrome and Bing is like ICBM, and MS and Google is safe as long as they possess Mutually Assured Destruction (MAS) capability.
• Market entry barrier in digital age is lowered, however. Product diffusion is so fast that it does not take economy of scale to catch up with the frontrunner. It's not the size in the network that matters. New concepts like fitness, which Kang hui mentioned may be important. As the chapter illustrates, Cable TV has become a competitive market in less than a decade. MS has ousted IBM. The balance MS and Google enjoy is very vulnerable.
• Entry barrier in media market could be measured in quantitative terms, just as market concentration is measured by CR4. There are hyperlocal media markets with high barriers. In these markets, old style small newspaper media enjoy monopolistic profit on and off line. On the other hand national market like Cable TV can be more easily penetrated than it seems. Like Younghwan said, entry barrier could be an interesting predictor variable for various outcomes.
• As Cringely implies, MS and Google should be more worried about attack from within than each other. After all, it is post 9/11 era, not the era of the Big Red Button of nuclear attack. The competition is not just among the giants, it can be an asymetrical fight between the superpower and a small group.

To conform or to confront?

Cringely seems to suggest Google and Microsoft should not be rivals, or maybe just stay in where they are now. Especially for Google, “…yet of those thousands of ideas, the company can really invest in only a dozen per year, leading the dissatisfaction and defections as the best nerds leave to pursue their dreams.” This idea seems opposite to the common sense of big companies' strategy: come up more ideas and more competitive goods to bit the rivals and maximize the profits. Is it related to the Industrial Organization Framework in HMF that different strategies are used in different market structures? If so, it's interested that how the company position itself. Maybe Google positions itself as a great competitor of Microsoft, so it tries to take over the market in this case. Is it right to have such passion or set up the goal to compete with the Microsoft and enter the monopoly market structure? However, the desire to become the best or the only is also the drive to success (success in current business world's definition, not mine). What should a company make its strategy under the oligopoly or monopoly structure? To conform, or to confront?

Like the news on Yahoo homepage: Walmart's new strategy. It's definately not good for smaller business, but is it really good to the consumer for the long run (short run of course is good because of the lower price)?

Irrationaly consumer: I still love google more!

Again, the reading is here

I guess economists will have a word on my title. You prefer google because that's different tastes, so you enjoy more utility. Come on, I know I'm being irrational!

For:

• Microsoft's conspiracy: I guess Microsoft won't really do it so ostentatiously, but they might make their system support their search engine better than support google. This IS happening. Microsoft developed ActiveX. It's totally not standarized and MS is the only company using it. Other browser can support it, but never as good as I.E. does. (So if one developed a page with ActiveX, user can almost only use I.E.)
• Google is only making money on Ads. (They also do source out actually.) Well, silly stuff like google calendar, igoogle are not really profitible for Google. But that's why google is cooler than other company! Maybe they're not makeing money on it, but isn't it a good way to form the company's reputation?
  

Against:

• Google's 20% policy: When I was an engineer-major student, I always dreamed entering a company like google, because at least I have more possibility to do what I'd like to do. Google's 20% policy might sounds silly, but that's how google absorb smart engineers