Is Google the Next Microsoft? Competition, Welfare and Regulation in Internet Search

44 Pages Posted: 9 Sep 2008 Last revised: 25 Oct 2012

Rufus Pollock

University of Cambridge - Faculty of Economics and Politics

Date Written: April 2009

Abstract

Internet search (or perhaps more accurately 'web-search') has grown exponentially over the last decade at an even more rapid rate than the Internet itself. Starting from nothing in the 1990s, today search is a multi-billion dollar business. Search engine providers such as Google and Yahoo! have become household names, and the use of a search engine, like use of the Web, is now a part of everyday life. The rapid growth of online search and its growing centrality to the ecology of the Internet raise a variety of questions for economists to answer. Why is the search engine market so concentrated and will it evolve towards monopoly? What are the implications of this concentration for different 'participants' (consumers, search engines, advertisers)? Does the fact that search engines act as 'information gatekeepers', determining, in effect, what can be found on the web, mean that search deserves particularly close attention from policy-makers? This paper supplies empirical and theoretical material with which to examine many of these questions. In particular, we (a) show that the already large levels of concentration are likely to continue (b) identify the consequences, negative and positive, of this outcome (c) discuss the possible regulatory interventions that policy-makers could utilize to address these.

Keywords: Search Engine, Regulation, Competition, Antitrust, Technology

JEL Classification: L40, L10, L50

Suggested Citation

Pollock, Rufus, Is Google the Next Microsoft? Competition, Welfare and Regulation in Internet Search (April 2009). Available at SSRN: https://ssrn.com/abstract=1265521 or http://dx.doi.org/10.2139/ssrn.1265521

Rufus Pollock (Contact Author)

University of Cambridge - Faculty of Economics and Politics ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom

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