Why Competition Really Is Good For The Consumer
Recently, there has been a lot going on in the Internet sector, and I wanted to comment on the patterns and underlying causes. The big news is that the new MSN is out, with new features such as Desktop Search, Encarta search, etc etc. In other words, they copied Google. This is great! Without Google, Microsoft would have had no incentive to fix their bloated MSN Search. That's one example.
Another example that will play out within a few months is that of the browser. Back when Netscape was around, there were a lot of releases from Microsoft showing new features and functionality in IE that Netscape didn't have. Netscape, in return, build new features that IE didn't have and also included the new features of IE. It went back and forth until Microsoft gave IE away for free, thereby killing off Netscape. Since then, Internet Explorer hasn't done much exploring.
Until now. Netscape is back in open-source format under the Firefox name and it is making huge gains on IE. I, for one, switched to Firefox and never looked back. Now that Microsoft is feeling the pressure, they have announced a "major" upgrade to IE. Hmm... we haven't had any real changes (except patches every Tuesday) for 5 years. If it wasn't for Firefox, Microsoft wouldn't have done anything with IE.
In summary, competition breeds innovation. When you have no money and have a family to support, you improvise. The smarter, more cunning amongst us think of new ideas and build beautiful companies out of sheer necessity. That is exactly why no monopoly will exist for long. Once they become lazy, a surprise new competitor will come out and rock their world.
Hail to the phenomena of economics!
Another example that will play out within a few months is that of the browser. Back when Netscape was around, there were a lot of releases from Microsoft showing new features and functionality in IE that Netscape didn't have. Netscape, in return, build new features that IE didn't have and also included the new features of IE. It went back and forth until Microsoft gave IE away for free, thereby killing off Netscape. Since then, Internet Explorer hasn't done much exploring.
Until now. Netscape is back in open-source format under the Firefox name and it is making huge gains on IE. I, for one, switched to Firefox and never looked back. Now that Microsoft is feeling the pressure, they have announced a "major" upgrade to IE. Hmm... we haven't had any real changes (except patches every Tuesday) for 5 years. If it wasn't for Firefox, Microsoft wouldn't have done anything with IE.
In summary, competition breeds innovation. When you have no money and have a family to support, you improvise. The smarter, more cunning amongst us think of new ideas and build beautiful companies out of sheer necessity. That is exactly why no monopoly will exist for long. Once they become lazy, a surprise new competitor will come out and rock their world.
Hail to the phenomena of economics!
1 Comments:
Sev here.
Yes, there will always be competition in NEARLY every firm. It is a very good thing because technology and the business sector (whatever that may be) will progress. However, there are a few (very low number) of companies or business sectors that are so well established and are monopolies that it is very difficult for anyone to even try to compete. Microsoft is a prime example here. They have so much capital that even if a few GENIUSES think of something brilliant, Microsoft will buy them out before their birth. Unless it's an amazingly revolutionary idea and is carried out correctly (proper copyrights/legal documents). Microsoft will probably STILL buy them out. lol.
Yes, I'm an econ major.
;)
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