I’ve just put out an updated version of my paper on Search Engines entitled: “Is Google the next Microsoft? Competition, Welfare and Regulation in Internet Searchâ€, the original version of which went up in June. The revised version is available either from SSRN:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1265521
or from here:
http://rufuspollock.org/economics/papers/search_engines.pdf
Abstract
Internet search (or perhaps more accurately `web-search’) has grown exponentially over the last decade at an even more rapid rate than the Internet itself. Search engine providers such as Google and Yahoo! have become household names, and the use of a search engine, like use of the Web, is now a part of everyday life. The rapid growth of online search and its growing centrality to the ecology of the Internet raise a variety of questions for economists to answer. Why is the search engine market so concentrated and will it evolve towards monopoly? What are the implications of this concentration for different ‘participants’ (consumers, search engines, advertisers)? Does the fact that search engines act as ‘information gatekeepers’, determining, in effect, what can be found on the web, mean that search deserves particularly close attention from policy-makers? This paper supplies empirical and theoretical material with which to examine many of these questions. In particular, we (a) show that the already large levels of concentration are likely to continue (b) identify the consequences, negative and positive, of this outcome (c) discuss the possible regulatory interventions that policy-makers could utilize to address these.