The Instability of Monopolies

Yesterday's New York Times carried an interesting op-ed from former Microsoft veep Dick Brass wondering how and why the world's most successful company lost its way. Excerpt:

Microsoft has become a clumsy, uncompetitive innovator. Its products are lampooned, often unfairly but sometimes with good reason. Its image has never recovered from the antitrust prosecution of the 1990s. Its marketing has been inept for years; remember the 2008 ad in which Bill Gates was somehow persuaded to literally wiggle his behind at the camera?

While Apple continues to gain market share in many products, Microsoft has lost share in Web browsers, high-end laptops and smartphones. Despite billions in investment, its Xbox line is still at best an equal contender in the game console business. It first ignored and then stumbled in personal music players until that business was locked up by Apple.

Microsoft's huge profits — $6.7 billion for the past quarter — come almost entirely from Windows and Office programs first developed decades ago. Like G.M. with its trucks and S.U.V.'s, Microsoft can't count on these venerable products to sustain it forever.

Read the whole thing to sort out analysis from sour grapes, but I'm more interested in a macro fact about monopolies: Namely, unless they're either run or locked into place by government, they do not last. And even government-run monopolies produce mass consumer defections. (A corollary to the Monopoly Rule is the Dictatorship Rule: totalitarianism, because it produces such unhappiness, is inherently unstable.) Companies that grow bloated on profits squeezed from a seemingly captive audience end up panicking when those consumers wriggle free to buy and even create competing products. Meanwhile, corporate cultures in (temporarily) uncompetitive industries are the very definition of non-innovative, even in technology companies.

The same holds true for companies that aren't technically monopolies, but are able to rack up double-digit profit margins while not having to fend off a mirror-image competitor. Trust me, the L.A. Times was called the "velvet coffin" long before the "corporate bean counters" or Evil Sam Zell showed up. Even areas where market consolidation produces noticeably awful product--I'm thinking here of the 1990s wave of radio consolidation--the combination of disgruntled consumers and liberating technology are able to produce innovative workarounds faster than you can say "theme time radio hour."   

Something to think about as regulators here and abroad start targeting Google (it's amazing to me how seamlessly Google has replaced Microsoft as the demon sheep of technology companies in the eyes of the French, for example), and as the Obama administration mulls ramping up antitrust prosecutions more generally.

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  • Mango Punch||

    What about natural monopolies (or oligopolies)?

    Welcome to company life-cycle 101!

  • ||

    What about them?

    The only natural monopoly I can think of is government, and it is a natural monopoly only because of the ubiquitous notion that government has a monopoly on the legitimate use of force.

  • Old Mexican||

    What about natural monopolies (or oligopolies)?

    Like what?

  • jmanon||

    Like potash in North America. Something with a limited natural supply owned nearly exclusively by one or two entities.

  • ||

    How about something without qualifiers?

    If I can get my potash from Germany instead of Canada, there is no natural monopoly in potash.

  • Old Mexican||

    That's not a natural monopoly. The concept means a good that has only one possible supplier, which entails the impossiblity of there being any other supplier. Such a thing cannot exist in this universe EVEN in the face of State coercion.

    There cannot be such a thing as a good that has only ONE source, for the simple reason that VALUE IS SUBJECTIVE: what makes a thing a "good" is the subjective valuation by people, and if people get tired of a single-supplier "good", they will find substitutions, so what was so "natural" about the monopoly? It isn't.

  • Michael Ejercito||

    The concept means a good that has only one possible supplier, which entails the impossiblity of there being any other supplier. Such a thing cannot exist in this universe EVEN in the face of State coercion.


    I am certain that there is a natural monopoly on dubnium.

  • Shannon Love||

    Besides the reason in the previous responses, you also can't create a natural monopoly because there isn't any good that has no substitute or multiple means of manufacture.

    Potash is a weird example. It's just potassium carbonate and in principle it can be made from sea water and air.

    A lot of seeming "natural monopolies" are simple super efficient providers of a particular good. No one can compete with them because no one can do it more efficiently. In that case, the "monopoly" actually is the economic optimum short-term. There is no benefit to be gained by disrupting them.

    Of course, as noted, such monopolies are inherently unstable. Technology or other changes will destroy them.

  • ||

    De Beers?

  • ||

    Would that be this De Beers?

    In the 1990s, it became increasingly evident that De Beers’ industry custodianship and supply-controlled model was no longer viable. De Beers was also unable to conduct business in several jurisdictions where it had interests or a corporate presence due to their dominance in the diamond industry. In addition, more producers from varied locations such as Russia, Canada and Australia chose to start distributing diamonds outside of the De Beers channel, thus effectively ending the monopoly... De Beers conducted a strategic review with Bain & Company, consequently changing its business model from a supply-controlled industry to that which was driven by demand... As a result of company transformation, De Beers is now more profitable today with a 40% market share than when it maintained an 80% market share.
  • robc||

    There are 4 major smart phone technologies right now, 3 based on linux, 1 based on BSD (Apple), and zero based on Windows Mobile.

  • ||

    Maybe if the 360 didn't sound like a hovercraft...

  • ||

    My 360 isn't that loud.

  • ||

    I've got one of the "quiet" ones, and I think it still sounds like a roomful of servers. The PS3 is so quiet I can't even tell it's on most of the time.

    I think both machines play games equally well, but the PS3 is quickly becoming my default for multi-platform games. The in-the-box rechargeable (mini-USB) controller, built-in wi-fi, functional web-browser, and eerie silence whoop-ass on the 360.

  • Old Mexican||

    The only problem I see with the PS3 (and I love mine, don't get me wrong) is that it is a gamer's only platform. For family gaming, the Wii stands out from the rest. However, the PS3 does have something that helps it endear itself with the family at least in one respect and that is the Hi-Def (Blu Ray) playback capability and the fact that Netflix struck a deal with Sony to allow Instant Play through the PS3 (which requires placing a special DVD on the machine). We can now watch all seasons of Survivorman and even all Kolchak: The Night Stalker shows! (For the newer releases, Netflix sucks.)

  • ||

    There is one dickish thing, but I don't think it's the PS3s fault... hulu doesn't work on it. Assholes.

  • ||

    I have a Wii too. I don't use it much unless I have people over. A bunch of booze makes Mario Party fantastic. Just take a shot right before each battle minigame.

  • ||

    The on-line platform is free for the PS3, too, which is an advantage. My dad and brother both have the PS3.

  • ||

    You must have gotten yours after 2007 or 2008.

    Back then, the DVD drives were REDONKULOUSLY LOUD.

    The difference between that and the HDMI-equipped XBoxes is night and day. I know this because Mass Effect 2 finally ate my original box (Red Ring Hooray!).

  • JB||

    A point well-worth saying and repeating often.

  • brotherben||

    I still have my NES system that I bought new in 1988. It still works. The Zelda game I bought in 1989 still works and the battery in it still keeps games saved. My X-Box died after 3 years. My 360 died within a year of purchase and has been sketchy even after Microsoft warranteed the repair. I cant' speak about software as MS products are always in the computers we buy and I just don't know anything different.

  • ||

    My NES crapped out about ten years ago, but my SNES is still going strong. I do have two working 2600s, though.

    My boss collects 2600 games, she has 84% of the games that were issued in North America.

  • ||

    Your 2600 joysticks still work? That I find amazing. Those things used to wear out pretty quickly. The game unit I can see holding on.

  • ||

    The consoles and most of the games are the ones my wife and I had as kids. I doubt any original controller survived.

    I used to go to Goodwill a lot in the late-80s and early-90s. I have about a dozen working controllers.

  • ||

    They can be repaired, too. Trust me, I know.

    I used to have old platforms and PCs, but my wife made me purge them.

  • ||

    Luckily (?) I married a fellow pack rat.

  • ||

    My mom married a pack rat recently. He has about 3 dozen 2600 games and a console. He was going to throw them away.

  • ||

    Not me, but at least the Great Compromise left me my thousands of books.

  • Suki||

    Oh sure. Like real people still have paper books. I smell another screenplay by BakedPenguin.

  • ||

    Whatever. Remember that old lady in Fahrenheit 451?

  • Old Mexican||

    They [Atari controllers] can be repaired, too. Trust me, I know.

    We used to have a VIC20 back in the early 80s and the joysticks it used were Atari's. In order to keep them working, my father and us made the trip to the US to Radio Shack (we were living in a border town south of Arizona back then - we lived just 2 blocks south of the actual border), purchased some miniature pushbutton switches, and changed the "oilcan" crapped out switches. It worked like a charm - until the plastic pushrod frame failed.

    When we switched to the TRS-80 Color Computer, the joysticks used potentiometers that tended to get dirty after several cycles of use. We also changed these after a trip to Radio Shack. Nowadays, the controllers are pretty robust, but nobody I know can repair them nor do they try - they are practically throwaways, anyway, thanks to their relatively low cost. Thank you, CHINA!

  • ||

    Microsoft's huge profits — $6.7 billion for the past quarter — come almost entirely from Windows and Office programs first developed decades ago.

    Which are themselves often mediocre and bug-addled. Microsoft's market dominance is a function of inertia. If the standalone PC regresses back to a thin client with the internet as server they could become an asterisk.

  • Patch 2,398||

    YOU LIE!

  • darjen||

    This is a function of the intellectual monopoly granted by the state. Nothing more.

  • ||

    Yes, but I do like Windows 7. No issues so far for me.

  • ||

    Windows 7 is really quite good. Microsoft excels in certain areas and sucks in others. Visual Studio is a pretty amazing development environment, especially compared to what it's like for Ruby developers, etc. SQL Server is a pretty damn good database, and has excellent tools. I remember working with Oracle 8i and it still makes me cringe to this day.

  • robc||

    Eclipse has a ruby plug-in. Ive never used Eclipse for anything but java however.

    I primarily use vi as my development environment. :)

  • ||

    rob, you are a propeller-head of the worst variety.

  • robc||

    I have never claimed otherwise.

  • ||

    Nice!

  • ||

    Ignore, was meant for vi joke below

  • EscapedWestOfTheBigMuddy||

    I know some vi.

    Just enough to get emacs installed.

  • Suki||

    +1

  • robc||

    Im trying to figure out why you would need vi in order to install emacs?

    Nothing quite as much fun as which an emacs-only admin (the good ones would know both) try to fix a fuxored box that can only run vi. And barely do that.

    ssh
    vi foo.conf
    quick tweak
    :wq
    /etc/init.d/foo restart
    exit

    All before emacs loads

  • EscapedWestOfTheBigMuddy||

    Why vi to install emacs?

    I learned that before emacs came in a nice system packages (my first unix was minix 2, my first linux was an early slackware). There were always a few files that had to be edited before emacs would build.

  • ||

    Try vile (VI Like Emacs). It's a vi finger-feel built on the old microemacs kernel.

    It's the best of both worlds.

  • ||

    DXVA is very nice. Win 7 is pretty good.

  • ||

    I think that highlights MS's biggest problem--it tries to do much rather than focusing on some core areas.

  • ||

    2 of my more faithful Mac users, who have used our Windows 7 laptops, commented on how nice and intuitve it is. One of them, our graphics guy, was dredding using and he said that he didn't have to figure anything out when he was giving a presentation. It just worked.

  • ||

    Wow, they've actually made it onto the same playing field as Mac OSX!

  • BakedPenguin||

    For smaller databases, Access is very handy. Excel 2003 was a great spreadsheet. Their VBA capabilities allowed you to do a lot with off-the-shelf products.

    Of course, now with Office 2007, if you use VBA, the user has to check a fucking box every time they open the spreadsheet or database, and the 2007 files cannot be opened by people with 2003. So fuck you Microsoft, I'm using Open Office, even if that asshole Ellison is now in charge.

  • robc||

    Unlike StarOffice, OpenOffice is open source, so Ellison isnt in charge, really. If he does anything to fuck it up, it forks.

    The problem is self-correcting.

  • Suki||

    Fork fucking will free the masses.

  • BakedPenguin||

    Good point robc. I could also just shut off updates...

  • Rhywun||

    Enh, I'm not impressed with 7. Explorer has become a clusterfuck. They're still fucking around with UI -- it seems like no 2 MS programs have a consistent UI any more.

    Agree about VS and SQL Server, though. Probably their best two products. It would be nice if they fixed the bugs that persist in version after version of VS, though.

  • ||

    The VS editor still sucks wet green donkey dongs. Most of the other stuff in VS is great, but the editor is still decades behind other professional text editors.

  • Sam Grove||

    It's actually pretty amazing what Microsoft has managed to do; produce an operating system that can run reasonably well on untold numbers of component assemblies.

    Apple is able to ally its OS with its own hardware without having to allow for so many variables.

  • robc||

    Linux runs on many more hardware platforms than Windows does.

    Considering OSX is BSD, same is true for Apple with some tweaking.

  • ||

    But he does have a point. Mac OSX owes much of its stability to having limited hardware targets. Ditto for old Solaris. Both OSX and Solaris took a hit in stability when they migrated to the i386/PCI platform

  • robc||

    Why is Linux stable across multiple platforms?

  • Shannon Love||

    Because most Linux installs have some ubergeek doing the computer equivalent of hand filing the parts until they fit just so.

    I've done my share of Linux installs and on virtually every one everything went smooth as butter until I hit that 1% of an issue that took up 90% of the time.

    It's that final bit of expert tweaking that makes all the difference.

  • ||

    Microsoft's market dominance is a function of inertia.

    Or, you know, they are the right tool for the job.

    They still have dominence because:

    A) Computers are tools, not statements of who you are.
    B) Competitors don't offer compelling reasons to use their product, including price.
    C) Most people aren't techies and buy what they know how to use. Is that inertia or rational self-interest? You can say the same about Apple users (tho' the iZealots fall into a totally different catagory) I know enough elderly who have no interest in learning a new OS just to get email, look at family photos and surf the web.

    I manage my .org's network. We have Mac faithful here, whom I mock when needed (like when they gush about how a computer is "life changing"). We use industry products that depend on a Windows architecture and at the end of the day, I spend 40%+ less on Dell hardware than I would on Apple hardware, which includes as technician-on-the-site warranty, at worst, by the next day with part in hand (which I rarely need to use-but it's good to have when I do). No schleping to the Apple store at the mall. Anti-virus only adds about $30/year/seat, which doesn't even come close to evening the score for Apple, and we haven't had a virus in-house since 2002. That's money in the bank.

    Apple simply doesn't have the enterprise support or the technical support base in terms of potential help desk candidates, for it to be even a contender here. Windows just works for us.

    mediocre and bug-addled

    This is true of all OSes. OS X update delete your hard drive lately? Apple's QC sucks IMO. They can't even release an update to their own OS on their own hardware that doesn't run a significant chance of borking the system. A long-time aquaintence of mine, and an elder iZealot, advises his clients to avoid anything before a 10.x.2 release. It takes them a couple of tries to get it right.

    All that said, use whatever tool works for you. Full stop.

  • ||

    Or, you know, they are the right tool for the job.

    If there is an app Microsoft makes that doesn't have a lot of alternatives, both GNU/open source and cheaper it is probably very discrete.

    This is true of all OSes.

    To varying degrees, and I do not agree that other software companies compromise anywhere near as much as Microsoft. Way too much of their QA is done by paying customers. Price and network effects are big considerations but it is possible to run a stable and secure development and desktop environment without ever paying a penny to Microsoft.

  • ||

    I use open source whenever possible, but it's usually for one-off situations: Filezilla, 7-Zip, VLC, etc. The free help desk app I use, Spiceworks, runs on Ruby, and is very nice. It's not technically open source, but it builds on OS tech.

    MS is having trouble, not because it's a "monpoly", which it never was, but becasue it's a large and heavily stratified company. They are the IBM of their own time.

    I said this to all of the MS-haters back in 2000, who jumped up and down about monopoly status and how the guvmint needed to stomp on them, that younger and more inovative competitors will eat their lunch if they continued down the path they were on and that no action was needed. Of course, they all deny I ever told them this.

  • robc||

    As I mentioned upthread, its primarily happening in the smart phone area. MS isnt adapting, there underlying OS code base isnt flexible enough to deal with the situation.

  • ||

    Well, they are adapting with WM 7.0, but as they always do: a day late and a dollar short. Give me an Android or Blackberry phone any day.

    I love my Zune, much more than I ever did my iPod, but that line may not be long for this world. Who knows, maybe they'll actually promote it a 1/1000 as much as Apple does their products.

  • ||

    MS isnt adapting, there underlying OS code base isnt flexible enough to deal with the situation.

    Are they still calling it WinCE? A most apt nickname.

  • ||

    I said this to all of the MS-haters back in 2000, who jumped up and down about monopoly status and how the guvmint needed to stomp on them, that younger and more inovative competitors will eat their lunch if they continued down the path they were on and that no action was needed.

    That's good foresight. I am a M$-hater but never because I considered them to be monopolists. I just think that given the man-hours they put into development, and the lost productivity their apps foist on the rest of the world, they can do much better.

  • ||

    Oh, I agree, they can do better. I do think that their development is getting better, but it's a long haul.

  • ||

    Price and network effects are big considerations but it is possible to run a stable and secure development and desktop environment without ever paying a penny to Microsoft.

    Very true, but you have to have the resources to support that type of operation. Being a .org, we can do MS on the very, very cheap and have no trouble finding support.

  • ||

    A corollary to the Monopoly Rule is the Dictatorship Rule: totalitarianism, because it produces such unhappiness, is inherently unstable.

    Mr Welch, what planet do you live on? Apparently not the one I live on, where about half of the world's population lives under totalitarian regimes and has for several decades.

    Totalitarianism is extremely stable. The name of the particular totalitarian in charge at any moment is very changeable, I agree, but the system itself is self-perpetuating.

  • kinnath||

    The Soviet Union collapsed under its own weight in about 80 years -- a mere four generations.

  • Suki||

    It is already staging a comeback.

  • Shannon Love||

    Well, that and the fact they realized they were doomed to decisively lose any military race with the resurgent America. In the end, they were spending 40% of their GNP on an increasingly obsolete military sector.

    It's an interesting thought experiment about what might have happened if for some reason the Soviet Union had never had any serious external enemies. They might have gone on for a long, long time.

  • anonymous||

    Totalitarianism tends to eventually kill off most of the people who tend to chafe under totalitarianism, so there are evolutionary reasons for its stability (and evolutionary reasons for those who chafe under totalitarianism to treat budding totalitarians with extreme prejudice).

  • ||

    former Microsoft veep Dick Brass

    I can't come up with a joke worthy of that handle. A little help, here?

  • ||

    He'll never be ambassador to an Arab nation, I can tell you that.

  • Old Mexican||

    Well, does it turn green in the presence of oxygen?

  • kinnath||

    Nurse: What can we help you with today, sir?

    Patient: I have an erection that won't go away no matter how many times I do it. What can you give me?

    Nurse: I've got forty buck in cash and you can have my wedding ring.

  • ||

    State-run schools are a natural monopoly; well-educated compliant citizens are vital to a stable society.

  • MRK||

    Monopolies may not last, but they certainly do a lot of damage to their industry over the life of the company. Especially as a company focus more on influencing Congress than consumers.

    With their control of the PC market, I could see Microsoft deemed "To big to fail" and propped up by the govt. in perpetuity.

  • ||

    I'll give MS credit for this: Until the Clinton DOJ decided to go after MS, MS had practically no presence in DC. Now, of course, they've learned their lesson.

  • Old Mexican||

    Re: MRK,

    Monopolies may not last, but they certainly do a lot of damage to their industry over the life of the company.

    Only in the presence of government.

    Especially as a company focus more on influencing Congress than consumers.

    Then get rid of government.

    With their control of the PC market, I could see Microsoft deemed "To big to fail" and propped up by the govt. in perpetuity.

    Sure, considering people don't have choices:

    http://distrowatch.com/
    http://www.openoffice.org/
    http://www.mozilla.com/en-US/firefox/ie.html

  • ||

    I put a Linux partition on my brand new (in November) Toshiba laptop; I haven't been to the Windows 7 side in a couple of months.

  • robc||

    Havent owned a MS machine since Windows ME release candidate zero.

  • ||

    I booted into Windows for the first time in a year last week. It look me a couple of hours of downloading updates and half a dozen reboots before I could start using it.

    p.s. I wanted to play a game of Myst

  • BakedPenguin||

    Remember the government went after IBM in 1981? Good thing they did, because no events that occurred after that would have changed IBM's dominance in the computer market without government intervention. Also, without government going after Microsoft in 1992, they surely would have taken over the Internets! HURR DURR....

    That said, it's fine with me if they go after college basketball. It will keep them from doing more real damage, and I don't give a shit about college basketball anyway.

  • ||

    I once read a pretty compelling argument that DOJ's witch hunt of MS helped accelerate the dot com crash. Coupled with the CDA and some other attempts to wrest control of the Internet from users, I'd not be surprised to learn that was true.

  • robc||

    That's like saying that "flip this house" helped accelerate the housing bubble crash. Its true, but not an underlyiing cause.

    Both bubbles were caused by the same thing.

  • Me||

    Solar cycles!

  • Shannon Love||

    That is not an easily supported assumption. The governments case against IBM had to do with their mainframes, not their desktops. The "anti-trust" case had zero effect on the evolution of personal computers.

    IBM had little understanding of the desktop market or desktop computers and they viewed them as nothing more than terminals for their mainframes. Their entire history in desktops has been one of playing catchup or launching grandiose innovation that fell flat. The company played a relatively minor role in history of PCs.

    About the only thing they did conclusively was make them acceptable to business in a time when they were still considered geek toys. However, in retrospect, they only accelerated the adoption trend by a couple of years at most.

  • John||

    While IBM did little to advance the technology of PCs, I have a hard time viewing its role as "relatively minor." Unlike most players back in 1981, IBM made decisions we are still living with. Specifically, IBM created the whole Wintel ecosystem. Prior to the IBM PC, Microsoft was not active in the OS market and the 8086 was a minor player in the CPU market.

    It's interesting to think of the counterfactual of IBM not entering the PC market. I agree it would have still taken off a couple years later. But with the mainstream business market stuck on Z80 and CP/M, how would the chasm been crossed? Macintosh? Sun pushing their workstations down into the PC space? Tandy? All three, BTW, chose the 68000 over the 8086.

  • ||

    I'm more interested in a macro fact about monopolies: Namely, unless they're either run or locked into place by government, they do not last.

    Considering that copyright is a government granded privilege, Microsoft fits into that camp as well.

  • Steve Smith||

    Matt, concerning the "macro fact about monopolies," how do you think that applies to the monopolies that you and I confront everyday in our leisure hours, namely sports monopolies. The NFL and MLB both seem to be long-lasting, efficient, and as far as I can tell, there is little consumer dissatisfaction with the product. And none of those monopolies are "locked into place" by Evil Government.

  • robc||

    NFL isnt a monopoly. This season I attended zero NFL games and 3 college games. Its like I had a choice.

  • robc||

    Also, is the NFL one company or 32? I guess technically 33 (32 for profit* and 1 non-profit).

    *including Green Bay, whose profit goes to a foundation.

  • SammyA||

    "...there is little consumer dissatisfaction with the product".

    Which is exactly why there is nothing inherently wrong with monopolies, though robc correctly points out that the NFL isn't really a monopoly anyway.

  • ||

    Concerning the discussion on "natural monopolies", the term is quasi technical. An industry is a natural monopoly when economies of scale can continue to be reaped across the whole range of possible demand. In other words, when the economy's aggregate demand curve for a product crosses the average cost curve at a point where the curve is still declining. In those circumstances, the largest firm, all other things equal, enjoys a cost advantage that will sooner or later see the exit of the rest. No mischief involved.

    Such is the justification for much government regulation. The rub is that industries where this condition exists are as rare as hen's teeth.

  • Robert Arvanitis||

    Another interesting aspect of monopolies. Cato has a piece showing "predatory pricing" is a myth; it ain't possible to create a monopoly by sheer size.

    See http://www.cato.org/pubs/pas/pa-169es.html

  • ||

    ...so, the American memory market taken down by predatory Japanese pricing and the desktop operating system market predatorily negatively priced by Microsoft are figments of our imaginations? It only takes one counterexample to disprove CATO's theory of predatory pricing being all a dream, so our reality says predatory pricing's REAL. Also, CATO's theory's incomplete, because predatory pricing's used for purposes other than creating monopolies, like in said memory case and in upstate NY's absurdly priced airline market.

    Aww, poor, poor Microsoft. The growth in customers they can torture with their buggy, spyware-prone software is down. But he even failed to prove his own assertion becuase his company's, oh, yeah, PREDATORY PRICING strategy's still working and keeping most of the desktop market.

  • anonymous||

    "But he even failed to prove his own assertion becuase his company's, oh, yeah, PREDATORY PRICING strategy's still working and keeping most of the desktop market."

    How do you figure? Predatory pricing is a short term unsustainable price cut intended to kill off competition, in order to raise prices long term. It's a game of chicken. If you keep prices low all the time, it isn't predatory pricing, it's just competition.

    Moreover, how exactly does Microsoft plan to cut their prices below the competition's price (ie, free)?

  • ||

    As I wrote above, Microsoft charges a negative price to distributors; they;ve been doing it for decades; there's nothing unsustainable about it. They pay distributors to distribute their computers using Windows. They make it back plus dev cost from a bunch of things - per-box charges consumers pay, OS upgrade $$$, and especially by selling Office and other packaged apps. The Japanese memory exammple cash came from the Japanese gummint and big keiretsu reserves and was paid back by cutting down on memory competition. US Air and Continental have kept upstate airline prices high for *decades* as well, by pricing low just long enough to put necessarily small-reserves startups out of business and charging vast sums in normal times.

    It doesn't say good things about CATO that they release papers so at variance with easily established facts in these days of google. Though, at least they've stopped being on board with the decades-long GOP lies on taxes, deficits, and small government that kept you libertarians on board. Remember, there is no small-government big party on your ballot, contrary to decades of GOP propaganda. There is a slightly more pro-liberty party, though, and that's not the GOP either.

  • ||

    Best analysis on the state of Microsoft was written on the Fake Steve Jobs Diary:

    http://www.fakesteve.net/2009/.....night.html

  • Tim Cavanaugh||

    it's amazing to me how seamlessly Google has replaced Microsoft as the demon sheep of technology companies in the eyes of the French, for example

    Once again, I'm with the French. The difference between Microsoft and Google is that Google collects more information about you.

  • ||

    I am not believe how poorly monopolies impact the economy, almost as bad as paying the interest on a short term loan. We need proper legislation to resolve this sometimes hard to see giants.

    I love facebook, microsoft and google - but the fact is, they flirt dangerously close to the line of monopolies.

  • demil-lor||

    bestpriceforsales equus 3100 works as it should but i strongly suggest to get the 3010 instead...much better value...this is bulkier and has a few useless features like a battery backup!?

  • daniel||

    hello Matt; As far as your article goes, i would have to say, its close. But the real problem of economics is inside this box. Yes, Miserysoft bill gates is a worm. He must be shot down, because his operating systems do not work. Unix just may be the one to do that, if they delete shared dll files. Of course for this to happen, the whole world would need to shut down its software. And start over. But as far as the beast goes, they cannot build it unless they do what I have just said. All along, Bill Gates is just a ruby ring of the murderer George W Bush. And the LA district Attorney, has it correct as far as proper morals goes. Arrest him. Do not let him pass go. Do not let him collect 200 dollars. And as far as bill gates and his peice of shit operating systems go, I still use 98se. You know why. Because that is when they started stealing from people, instead of giving an honest product for and honest buck. Now, xp and all that other stuff, along with the stupidest corporations I have ever seen, is causing their own destruction. Thats right, they are choking out the sales by to much spyware, that makes peoples machines crash. You know what the buyer does then? He turns it off. Because IT will not let him buy anyway. Thats right IT. From the Adams Family. And we all know that "IT", was a stupid thing. Honestly, they have offended My Lord. AND, they will pay for it. Mark my words

  • sathi2000||

    The science is settled! The data conclusively shows that these assclowns will not be happy until they control absolutely every part of every person's life.
    http://destinationsoftwareinc.com

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