

Android and the natural economics of digital goods - grellas
http://www.techdirt.com/articles/20110325/02373313623/android-economic-moats-how-zero-marginal-cost-defenses-can-also-be-great-offenses.shtml

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rbarooah
It's a good analysis.

One which points to a bleak future in which all work is done by employees of a
few monopolistic corporations that defend themselves against competition by
giving "good enough" clones of their competitors products away for free.

It seems like an effective strategy for defeating competiton and stifling
disruptive innovation.

I sincerely hope it fails.

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praptak
_"[...] monopolistic corporations that defend themselves against competition
by giving "good enough" clones of their competitors products away for free."_

I don't quite get how does this apply to Google. Who exactly is that
competition and how do they threaten Google?

To me it seems like they're defending against Microsoft-like tactics when
someone owns a part of the path between Google and its users (the browser, OS)
and tries to leverage that to harm Google's business. I don't see how what
Google does stifles innovation.

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rbarooah
You will when if Google decides they're afraid of your product giving you some
leverage and decides to give a clone away for free to undermine it's value and
damage your business.

Exactly the strategy that Microsoft used to destroy Netscape.

It stifles innovation because they don't need to do the hard work to advance
the state of the art. They just need to copy the work that's already been done
and let the free price and privileged advertising position do the rest.

It's good for Google, but bad for the rest of us. You can say 'but don't users
benefit from getting stuff for free?'. Well yes in a way, but we all lose
because of the stagnation it causes.

Again, pretty similar to what Microsoft has done in the past. It may be very
hard for corporations that have a quasi-monopoly to avoid falling into this
pattern in general.

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extension
How is Google entrenched in search? It's entirely feasible to build a
competitive product and there are a few out there. Nothing locks their users
in. Switching is no technical trouble, nothing needs to be relearned, and
there's no risk.

Android _weakly_ complements search, by making it the default, but it's still
easy to switch if one actually cares. And they don't have complete control of
the platform.

Really, they are just running on brand recognition from being uncontested for
so long, and arguably still. That's not a moat, that's just a really nice
castle.

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tomjen3
I have spent the last month testing DuckDuckGo as an alternative to having
Google as a default search engine.

While I am hugely impressed with the quality of search a one man company can
get, I am not impressed with DuckDuckGos results compared to Googles. It works
okay for many searches but it sucks a really long-tail queries and its "zero
click" information thingy has serious problems distinguishing between the
relevant results when more than one is potentially relevant (search for "black
swan". The most likely result, the recent movie, isn't even listed though an
ancient one from 19 _42_ is or search for "castle" which would normally give
the time and tv-station that program is one, except it confuse it with some
BBC documentary).

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endlessvoid94
It seems to me that "elevating the value of the castle" goods is precisely
what Warren Buffett said. He looks for the castles with surrounding moats
because they're valuable.

I don't really understand what this article adds to the discussion.

