Re: ONLINE-ADS>> Opinions on Yahoo's Monopoly Status

Kathy E. Gill (kathy.gill_at_boeing.com)
Tue, 06 Jan 1998 21:11:35 -0800

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Michael Sexton <msexton_at_amazonweb.com> wrote:
>Moreover, they are not using their dominant position to
> increase prices or prevent competition ... at least at this point.

Someone would be hard-pressed to make a case for monopoly power based on
market share OR on alternative search options. Too little of one and
too many of the other.

>
> Other Antitrust violatioions would occur if the company used its power
> to raise prices. Microsoft has lowered prices thus no violation. No
> blood, no foul.

MS has used its monopoly position in the OS market to keep prices for
the OS HIGH -- thus providing it with monopoly rents that make it
possible for it to "sell below cost" -- ie, give away -- a product that
it TIES back to other MS products (such as arrangements with ISPs to
give them CD-ROMs with MSIE for their customers, if they use MS server
software and if they don't support another browser, ie, Netscape).

The company would not be able to "give away" MSIE in such a manner were
it not for the monopoly rents it has garnered in the OS market.

And if you doubt that there ARE monopoly rents -- just look at the base
stock value, say in 1992, versus today -- and compare it with any other
firm that does not have a monopoly position in the marketplace. Wall
Street loves MS and Intel -- they generate above average returns for
investors at the expense of customers who have little choice. Classic
monopoly phenomena.

Kathy E. Gill
keg_at_dotparagon.com

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