Twitter: Joshua Gans- @jodiecongirl Actually, it says more about you that you've heard of them!
- @jodiecongirl I think it says that economists don't just assume rational agents but are attracted by them too. Talk about a value conflict.
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Readership
Feb
2
Microhoo!
February 2, 2008 | Comments Off | Joshua Gans
or is it Yasoft? Of course, it is Microsoft. The largest acquirer of start-ups of the 1990s is back, acquiring one it missed back then. The pundit verdict is that this is likely to be good for competition. But I think that the jury is still out on that one. For instance, between them, Yahoo and Microsoft had huge shares of webmail and instant messaging. But there are competitors there and so we can probably live with that.
More interesting is what this means in the local market. The most popular website — or portal — is Ninemsn. But another new entrant in the last few years is Yahoo7. Nine or Seven are going to be a loser from this merger and it is pretty easy to guess who is the more likely to go. This little local ‘broadcasting’ market is going to impacted on by this merger and it will be interesting to see whether the ACCC choose to deal with it.
The problem here is an old one: the markets involved here are not free of competitors and may not be that important in the scheme of things. Then again, the firms involved have built market share and market capital and so one has to wonder if there is more to this than meets the eye. Do we risk handing one key player over to another one or do we risk leaving that player to itself only to find that it may exit anyway and in a way that leaves the market less competitive (that is, by denying entrants a good exit strategy)?