May 5th, 2015
This is Professor Steve Wildman’s leaving lecture entitled ‘Domination in Search Markets: Why? How? and How to Respond?’. The lecture was given on 20 April 2015 at the Communication Arts and Sciences Building at Michigan State University.
With rare exceptions, national markets for Internet search services are dominated by a single company, in most cases Google. Factors contributing to highly concentrated national search markets have been vigorously debated. In this talk I present findings from research projects with two sets of collaborators. Results from an econometric study of Yahoo’s local search service with W. Wayne Fu and Carol Ting suggest that positive two-way feedback between the number of consumer searchers using a search engine and the number of advertisers purchasing paid placements on its search results page is of sufficient magnitude that an initial advantage for one search service in either paid ads or consumer traffic could be amplified over time to become a nearly insurmountable barrier to competitors trying to displace it. The second study with Adam Candeub suggests that strategic selection of other internet services to bundle with a search service can contribute to substantial lock-in of a search service’s customers. The implications of both studies for policy design are also discussed. Steve was introduced by the Chair of Media and Information, Professor Johannes Bauer, and the lecture concluded with closing remarks by the Dean of Communication Arts & Sciences, Professor Prabu David.