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The Dynamics of Competition in the Internet Search Engine Market

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  • Neil Gandal

    (Tel Aviv University, UC-Berkeley, & 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.

Suggested Citation

  • Neil Gandal, 2001. "The Dynamics of Competition in the Internet Search Engine Market," Microeconomics 0012003, EconWPA.
  • Handle: RePEc:wpa:wuwpmi:0012003
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Tarantino, Emanuele, 2013. "A simple model of vertical search engines foreclosure," Telecommunications Policy, Elsevier, vol. 37(1), pages 1-12.
    2. 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.
    3. Giarratana, Marco S. & Fosfuri, Andrea, 2004. "Product strategies and startups' survival in turbulent industries: evidence from the security software industry," DEE - Working Papers. Business Economics. WB wb044816, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    4. Haynes, Michelle & Thompson, Steve, 2008. "Price, price dispersion and number of sellers at a low entry cost shopbot," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 459-472, March.
    5. Avi Goldfarb, 2006. "The medium-term effects of unavailability," Quantitative Marketing and Economics (QME), Springer, vol. 4(2), pages 143-171, June.
    6. 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.
    7. Wang, Yuanshi & Wu, Hong, 2006. "Dynamics of a macroscopic model characterizing mutualism of search engines and web sites," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 363(2), pages 537-550.
    8. repec:eee:touman:v:47:y:2015:i:c:p:79-87 is not listed on IDEAS
    9. Pollock, Rufus, 2008. "Is Google the next Microsoft? Competition, Welfare and Regulation in Internet Search," MPRA Paper 8885, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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