Goliath vs. Goliath

It is an oligopoly. Yahoo and Google share 92% of the search engine market. These two companies would seem to have a strong rivalry between the two of them. This is far from the truth. The strategies of Yahoo are night and day and still they somehow are able to compromise to use ideas from each other to better serve their companies. Google encourages their employees to spend a fifth of their work day on crafty innovations to try and find ways to incorporate them into the Google production cycle. Yahoo mainly depends on research and development to innovate new technologies then using other company resources to implement them into the daily framework. The companies also seem to have a common understanding to not compete one against the other but almost create a collusion to help create a larger demand for their product.

1 comment:

Dr. Tufte said...

-1 for an incomplete clause in the 5th sentence.

This is a good example of an oligopoly that I had not thought of. Clearly there are few producers, the product is undifferentiated, and the barriers to entry are the huge fixed costs of setting up server farms.