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The Dynamics of Competition in the Internet Search Engine Market

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Author Info
Neil Gandal (Tel Aviv University, University of Calilfornia, Berkeley, and CEPR)
Abstract

Search engines hold the key to helping consumers access the wealth of information on the web. In this paper I examine the evolution of and competition in the internet search engine market. The goal of my analysis is to examine whether early entrants benefit in the long-run from their first-mover position in internet markets. I find that while early entrants (Yahoo, Lycos, Excite, Infoseek, and Altavista) still have an advantage, the pure "brand effect" advantage has been declining over time. Yahoo has maintained its leadership position by providing a superior product. The success of a wave of recent new entrants suggests that entry barriers are still quite low in the internet search engine market.

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Paper provided by Department of Economics, Institute for Business and Economic Research, UC Berkeley in its series Department of Economics, Working Paper Series with number 1017.

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Date of creation: 02 Jan 2001
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Handle: RePEc:cdl:econwp:1017

Note: oai:cdlib1:iber/econ-1017
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Related research
Keywords: Internet; Search Engines; Entry; Empirical Study;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Audretsch, David B. & Mata, Jose, 1995. "The post-entry performance of firms: Introduction," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 413-419, December. [Downloadable!] (restricted)
  2. Prusa, Thomas J. & Schmitz, James Jr., 1991. "Are new firms an important source of innovation? : Evidence from the PC software industry," Economics Letters, Elsevier, vol. 35(3), pages 339-342, March. [Downloadable!] (restricted)
  3. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer. [Downloadable!] (restricted)
  4. Geroski, Paul A & Machin, Stephen & Walters, Christopher F, 1997. "Corporate Growth and Profitability," Journal of Industrial Economics, Blackwell Publishing, vol. 45(2), pages 171-89, June. [Downloadable!] (restricted)
  5. Michael Smith & Erik Brynjolfsson, 1999. "Frictionless Commerce? A Comparison of Internet and Conventional Retailers," Computing in Economics and Finance 1999 1022, Society for Computational Economics.
  6. Aviv Nevo, 1999. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Competition Policy Center, Working Paper Series CPC99-001, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
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  7. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-90, July. [Downloadable!] (restricted)
  8. Rob, Rafael, 1991. "Learning and Capacity Expansion under Demand Uncertainty," Review of Economic Studies, Blackwell Publishing, vol. 58(4), pages 655-75, July. [Downloadable!] (restricted)
  9. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Andrea Fosfuri & Marco S. Giarratana, 2004. "Product Strategies And Startups’ Survival In Turbulent Industries: Evidence From The Security Software Industry," Business Economics Working Papers wb044816, Universidad Carlos III, Departamento de Economía de la Empresa. [Downloadable!]
  2. Avi Goldfarb, 2006. "The medium-term effects of unavailability," Quantitative Marketing and Economics, Springer, vol. 4(2), pages 143-171, June. [Downloadable!] (restricted)
  3. Allen N. Berger & Astrid A. Dick, 2004. "Entry into banking markets and the first-mover advantage," Proceedings, Federal Reserve Bank of Chicago, issue May, pages 243-254. [Downloadable!]
  4. Dan Elfenbein & Josh Lerner, 2001. "Links and Hyperlinks: An Empirical Analysis of Internet Portal Alliances, 1995-1999," NBER Working Papers 8251, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Andrea Fosfuri & Marco S. Giarratana & Alessandra Luzzi, 2005. "Firm Assets and Investments in Open Source Software Products," DRUID Working Papers 05-10, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies. [Downloadable!]
  6. Pollock, R., 2009. "Is Google the next Microsoft? Competition, Welfare and Regulation in Internet Search," Cambridge Working Papers in Economics 0921, Faculty of Economics, University of Cambridge. [Downloadable!]
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