I was under the impression that using your dominance in one market to secure dominance in another is considered monopolistic behavior—for instance, shipping IE with windows.
So how does a successful company continue adding things their customers want, but avoid getting accused of being a monopoly?
From what you're saying, it seems as though the company is damned either way. If you have earned a lot of market share, it doesn't matter whether you charge a high price or the lowest price ($0). Or is the answer just that when you reach a certain size, you should just be killed, never mind the cost to everyone else (including customers that depend on the products being offered as well as employees who have built careers working to make the company successful)?
Large companies don't do everything well, to be sure. But who is going to go out on a limb and fund the big bets, like Xerox PARC, Bell Labs, MSR, etc. if we keep cutting down the tall poppies? Academics have a place, but there are structural organizational and social reasons why they were not able to invent everything we enjoy today.
Bell was forced to spend a large amount on research and not keep the patents to themselves, or charge much for them, by the govt, because it was a natural monopoly. Ever heard of the transistor?
Thank you for this comment. Most people aren't aware of the relationship that Bell was in with the gov't because of its status as a monopoly. Before the gov't broke up Bell, it agreed to let Bell have the monopoly on the telephone system, and in exchange, Bell "gave back" to the public in the form of new, "public domain" technology. Not just the transistor, but also Unix and the C programming language. Sometimes I wonder how farther we might be in our technological development if Bell had never been broken up.
Folks wanting to know more about Bell Labs can check out "The Idea Factory" by Jon Gertner.
simple solutions are things like making separate ventures be actually independent. For example spinning off IE as a separate, independent company from Microsoft. One that would be free to make deals with other OSes.
Imagine if Apple bought Intel. It would be extremely likely that Intel would be forced to continue to sell its products to everyone, even if theoretically Apple might want to just stop shipping the parts to competitors.
This is exactly the model of the Roku - it started out as a Netflix Player, but realized that deals with other content providers would be key, and that other Netflix platforms may not want to compete with a Netflix-provided player, and so Netflix spun it off.
It's a $1.5B company now (not monopolistic/huge, but a nice business...)
From what you're saying, it seems as though the company is damned either way. If you have earned a lot of market share, it doesn't matter whether you charge a high price or the lowest price ($0). Or is the answer just that when you reach a certain size, you should just be killed, never mind the cost to everyone else (including customers that depend on the products being offered as well as employees who have built careers working to make the company successful)?
Large companies don't do everything well, to be sure. But who is going to go out on a limb and fund the big bets, like Xerox PARC, Bell Labs, MSR, etc. if we keep cutting down the tall poppies? Academics have a place, but there are structural organizational and social reasons why they were not able to invent everything we enjoy today.