Free Web Services by Major Players - Are they Exploiting their Dominant Position?

By: Kostis Panayotakis
Submitted: 2007-01-17 16:23:30
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Many free services are offered on the net. Some offer the usage of simple software. Others are offering the usage of computational and/or storage capacity in the long term. Others offer the access to huge databases (like search engines). The offering of free services is a common practice on the net aiming to attract users, build popularity and sell products or advertising space. There is always a business goal behind any free offering.

Many web startups offer something of interest and then try to find the revenue model to monetize it. That happened also with the major search engines, which started building revenue after they offered PPC ads. Google has marketed a high number of products with the aim to lure users into installing the Google search toolbar which combined with PPC represents its main revenue source. E.g. Google Finance offers currently financial information without presenting ads. Google fully understands that the lifetime value potential of each User is huge, given the relatively new market and the fact that many users are young. In the ongoing battle on the search engine industry, a further increase in its dominant market share will discourage competition to further invest heavily.

However, there is a rising risk to have major players exploit their dominant position.Whether or not Adsense publishers have a Google (SERP) advantage is currently under discussion and speculation. Some assert that “AdSense publishers’ content is indexed and cached more frequently (by a Googlebot dedicated to Adsense). Even if this is the case, it may be attributed to an Google Adsense effort to provide more contextually relevant ads. Moreover, getting spidered frequently does not necessarily mean a better search engine ranking (other factors like link popularity and relevance). The distributed nature and decentralised control of the Internet, should be a factor discouraging the abuse of dominant positions. The ability of Internet to self regulate should be protected.

Copyright 2006 –– Κostis Panayotakis

Relevant material can be found at http://www.pleroforea.com

Kostis Panayotakis

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