Andreessen: IE faces one-two punch

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Beating Standard Oil

You wrote:
Unlike Standard Oil which had a monopoly where no competition could exist (what is the competitor for oil?), MacroHard has a monopoly at THIS POINT IN TIME, and could (will) change at any moment.

Once upon a time, John D. Rockefeller was playing golf with a priest. He had just received advance word of the Supreme Court's decision endorsing the break-up of Standard Oil. "Got any money, Father?" he asked.
Like volunteer Linux workers, priests take a vow of poverty. The priest acknowledged he didn't, and JDF commiserated.
When the Supreme Court decision was published, the stock, which had already gone through the roof, went through the stratosphere. (Putting two cliches together makes something new, I hope.)
Investors were quite right. Not only did Standard Oil have assets the company hadn't bothered to capitalize, but each segment became hugely profitable. The parts were greater than the whole.

What made a market again was not legal action to control the monopoly, but the discovery of new sources for oil that Standard Oil did not already control. Investors in those sources kept Standard Oil out, but, of course, duplicated Standard Oil's methods to make huge profits for themselves.

Today, something similar is happening. Microsoft may be unbeatable on their home turf (see Mr. Berlind's failure to discern any realistic competition, much as he hoped to find some), but there are newer uses for software appearing. And, as with Standard Oil, those in control of the new markets 9usually hardware companies) are trying to retain control over the software and save on costs to increase their own profits.

The problem they're going to confront is that Microsoft is always there. When Microsoft is a significantly cheaper alternative to funding their own software development, companies in a very competitive market will have a cost advantage by going with Microsoft.

The companies that broke Standard Oil's monopolies were able to replicate what Standard Oil did cheaply enough. Microsoft's software development can probably stay cheaper than alternatives.
This Standard Oil is going to be much tougher to beat, particularly now that the Courts have shot their anti-trust bolt non-fatally.

Posted by: Anton Philidor   Posted on: 10/08/04 You are currently: a Guest | Members login | Terms of Use

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