[rbrogan]

The article is not convincing that these are natural monopolies. What happened to AOL and AIM? What happened to MySpace? There is also this recent article about Chinese innovation: https://news.ycombinator.com/item?id=10806386

Natural monopoly in the Information Age may turn out to have been natural, but it feels unnatural. There are explanations, but I, personally, do not find them to be convincing.

[mwsherman]

Agree. “Natural monopoly” is a very lazy term. It’s mostly about looking around at a moment and declaring that it must be so.

Utilities don’t need to be monopolies, necessarily. It’s just that they were designed that way at a point in time. It’s a path of history, but not a natural law.

Wintel too. Which was a monopoly, until it wasn’t. It’s not that their position in the market changed, but the definition of the market itself (i.e., computing became mobile).

Google (a monopoly) is (or was) terrified by both Facebook and Amazon. Neither of which is a search engine, but each of which is a path toward determining what product to buy. The market itself changes.

[jjoonathan]

The threat of possible disruption from an uncertain direction 10 years down the line is of a very different nature than the threat posed by direct, immediate competition. Why do you think it's "lazy" to find one type of competition less desirable and then notice and complain when certain markets seem to consistently gravitate towards it?

[mwsherman]

I don’t think what you’re describing is wrong. But a belief that something is a natural monopoly causes us to make policy choices based on a flawed assumption. Flawed choices about the inevitability of a monopoly tend to entrench same.

E.g. our municipal broadband monopolies trace back to a belief that wireline phone and TV can only be monopolies. And maybe it’s true! But we might have chosen differently, had we not assumed it a natural outcome.

We might have assumed that wireless is a natural monopoly. Gladly, we didn’t. (Though spectrum policy can be more competitive.)

[marklgr]

This is not about inevitability and immortality of monopolies, but their likelihood and the detrimental effects they bring on while they exists. Both can be pretty high in some domains, so it is worthwhile to think about it, to me.

[jjoonathan]

> But we might have chosen differently

Please elaborate on what you mean by "chosen."

[beambot]

Good point about utilities. Plus, with decentralized (solar) power generation, utility companies are really starting to show some cracks too. As soon as distributed energy storage is economically viable, they're going to need to adapt even further.

[afarrell]

What does energy generation have to do with the monopoly power of the folks who own the wires, buy from the bulk electricity market, and sell to consumers?

[beambot]

When customers can go 100% off-grid using rooftop solar and in-home storage, it bypasses and obviates the utility's monopoly on bulk generation and transport.

This actually causes a lot of issues, since the long-term fixed costs for the utility get spread across fewer paying customers. You're starting to see this problem in locales with heavy solar penetration (eg. Hawaii).

[joe_the_user]

The weird thing with the "also-rans" of various competitions is that they seem to utterly collapse in a strange fashion.

MySpace got shittier and shittier even as Facebook expanded and there was visible mind-share searching for new things.

Yahoo has gotten similarly worse despite being in a space where people wanted a Google alternative.

The impression I get is that also-rans basically aim to cash-out rather than continuing. The big thing seems to be few investors actually want to think long term and there's money only in being a market leader or in being ad-driven, self-discrediting crap-site - and it costs lots of money running a big website despite it seems like it should be cheap.

[Retra]

Some of those may be the result of trying to differentiate themselves. People might want an alternative to Google (the company), but they don't really want an alternative to Google (the search engine.)

If you're trying to beat someone like Google by offering a different-but-worse search engine, it's not really going to work. Facebook offers the same kind of problem. You're also not going to win by being the same. You have to do different-but-obviously-better, which is actually very very hard.