Competition Still Vibrant in Online Advertising

by on December 6, 2007 · 0 comments

The front page of the Wall Street Journal Marketplace section today gave me some hope that my work and the work of many other libertarian geeks has had an impact. The WSJ concluded that while there are dominant forces like Google, Yahoo!, and Microsoft in the online advertising field, that the dynamism of the market allows for upstart companies to grab their share of the $16.9 billion online ad industry.

Pointing out that markets are dynamic and that dominance is at best temporary and always under threat from competitors or future competitors seems like economics 101, but the job nonetheless needs to be done. Our collective memory seems to resemble that of a goldfish as many in the media believe that Google is, always has been, and always will be the dominant force in online advertising.

Of course, if market dominance really perpetuated itself, MITS would dominate the PC market. After all, in 1975 the MITS Altair 8800 outsold its closest competitor, the IBM 5100, two to one. This despite the 5100′s advanced cassette tape drive!

One would expect that after 30 years, having started in such a dominant position, MITS would control the entire high-technology world. Yet, somehow MITS lost this market dominance. Even the blue monolith of IBM lost to an outside player, an upstart named Apple.

More on the WSJ piece by my colleague Ryan Radia at CEI’s OpenMarket.org.

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