4 ms·

predatory pricing is undercutting a competitor to purposely drive them out of business. i dont think hackernews is trying to put other sites out of business, f

by basch 8y ago

predatory pricing is undercutting a competitor to purposely drive them out of business. i dont think hackernews is trying to put other sites out of business, far from it, as a link aggregator its business model is to push eyeball views elsewhere, similar to drudge. https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Predatory_pricing http://signalvnoise.com/posts/1407-why-the-drudge-report-is-one-of-the-best-designed-sites-on-the-web http://signalvnoise.com/posts/1407-why-the-drudge-report-is-...

scarface74 8y ago
Everyone here is talking about helping “future competitors”. How can you compete with free?
- airstrike 8y ago
  It's not like there's a paid alternative to HN that's struggling because this website is free. The existence of a free product doesn't imply predatory pricing.
  - scarface74 8y ago
    By keeping prices “artificially low” it’s keeping competition from forming. Yes this argument is silly. But it’s no sillier than the other arguments being discussed.
bko 8y ago
Why else would anyone lower their prices below that of a competitor if not to get the upper hand? So charging too much is wrong (exploiting your power) but charging too little is wrong (undercutting competitors). Whats the solution? Centrally planned prices have been tried failed.
- basch 8y ago
  it is usually used in the context of selling at a loss. so if amazon makes a ton of money on aws and then starts selling everything on amazon.com AT A LOSS, to purposely drive their competitors out of business, because nobody else can afford to sell at a loss for a substantial period of time. to prove it, you basically need written/recorded communication of them admitting they priced things that way to be anti competitive. theres probably some argument to be made that uber/lyft and any of the venture capital products being sold with vc subsidization are kind of doing this.
  - scarface74 8y ago
    I assume that almost every company that YC funds is losing money and selling thier services at a loss. How could I compete by selling profitably? The whole idea of most VC backed companies is to grow big and lose money until they get acquired.
    - basch 8y ago
      which is not the same as trying to purposely extinguish competition. its about INTENT, not just selling at a loss.
      - jjeaff 8y ago
        A textbook example of this would be Bezos dropping diaper prices through the floor and doing it long enough to nearly drive diapers.com out of business. After which, he squired the company.
        scarface74 8y ago
        Or YC funding a company until its non YC funded competitor went out of business to make its investment worth more. I’m not saying that YC has ever done that. I’m just taking the argument to it’s logical conclusion.
        deleted 8y ago
        [deleted]
tathougies 8y ago
> predatory pricing is undercutting a competitor to purposely drive them out of business. That is the purpose of all competition in a free market -- to achieve as large a market share as possible. In a stable market, this necessarily involves removing business from your competitors.
- scarface74 8y ago
  No the entire purpose is to make a profit. The most profitable company in the US is Apple. They didn’t get there by chasing market share.
  - tathougies 8y ago
    Profit is a function of competition. If Apple had competitors, it would not be able to charge as much as it did for its computers. You argue that Apple does have competition, and that's nominally true if you are very coarse and sloppy with your comparisons, but due to marketing and their walled garden, they are basically a monopoly over the upper / more artistic portions of the market: https://wccftech.com/apple-iphone-counterpoint-premium-smartphone-market-share/ https://wccftech.com/apple-iphone-counterpoint-premium-smart...
    - scarface74 8y ago
      Profit is a function of competition. If Apple had competitors, it would not be able to charge as much as it did for its computers. Are you really saying that Apple has no competition in computers? Apple has been competing against commodity PC makers for 40 years. Or are you saying that Apple doesn’t have competition making MacOS computers? Apple competes with generic PC makers by making a differentiated experience. There was nothing stopping any PC maker from doing the same. It wasn’t like Apple was making massive profits in the late 90s when it bought NeXT and started developing OS X. You argue that Apple does have competition, and that's nominally true if you are very coarse and sloppy with your comparisons, but due to marketing and their walled garden, they are basically a monopoly over the upper / more artistic portions of the market: They out competed. Any of the PC manufacturers could have produced a differentiated ecosystem in the 80s or 90s instead of using Microsoft. Apple didn’t have a monopoly on marketing channels.

by basch 8y ago

scarface74 8y ago

Everyone here is talking about helping “future competitors”. How can you compete with free?

airstrike 8y ago
It's not like there's a paid alternative to HN that's struggling because this website is free. The existence of a free product doesn't imply predatory pricing.
- scarface74 8y ago
  By keeping prices “artificially low” it’s keeping competition from forming. Yes this argument is silly. But it’s no sillier than the other arguments being discussed.

bko 8y ago

Why else would anyone lower their prices below that of a competitor if not to get the upper hand? So charging too much is wrong (exploiting your power) but charging too little is wrong (undercutting competitors). Whats the solution? Centrally planned prices have been tried failed.

basch 8y ago
it is usually used in the context of selling at a loss. so if amazon makes a ton of money on aws and then starts selling everything on amazon.com AT A LOSS, to purposely drive their competitors out of business, because nobody else can afford to sell at a loss for a substantial period of time. to prove it, you basically need written/recorded communication of them admitting they priced things that way to be anti competitive. theres probably some argument to be made that uber/lyft and any of the venture capital products being sold with vc subsidization are kind of doing this.
- scarface74 8y ago
  I assume that almost every company that YC funds is losing money and selling thier services at a loss. How could I compete by selling profitably? The whole idea of most VC backed companies is to grow big and lose money until they get acquired.
  - basch 8y ago
    which is not the same as trying to purposely extinguish competition. its about INTENT, not just selling at a loss.
    - jjeaff 8y ago
      A textbook example of this would be Bezos dropping diaper prices through the floor and doing it long enough to nearly drive diapers.com out of business. After which, he squired the company.
      - scarface74 8y ago
        Or YC funding a company until its non YC funded competitor went out of business to make its investment worth more. I’m not saying that YC has ever done that. I’m just taking the argument to it’s logical conclusion.
        deleted 8y ago
        [deleted]

tathougies 8y ago

> predatory pricing is undercutting a competitor to purposely drive them out of business. That is the purpose of all competition in a free market -- to achieve as large a market share as possible. In a stable market, this necessarily involves removing business from your competitors.

scarface74 8y ago
No the entire purpose is to make a profit. The most profitable company in the US is Apple. They didn’t get there by chasing market share.
- tathougies 8y ago
  Profit is a function of competition. If Apple had competitors, it would not be able to charge as much as it did for its computers. You argue that Apple does have competition, and that's nominally true if you are very coarse and sloppy with your comparisons, but due to marketing and their walled garden, they are basically a monopoly over the upper / more artistic portions of the market: https://wccftech.com/apple-iphone-counterpoint-premium-smartphone-market-share/ https://wccftech.com/apple-iphone-counterpoint-premium-smart...
  - scarface74 8y ago
    Profit is a function of competition. If Apple had competitors, it would not be able to charge as much as it did for its computers. Are you really saying that Apple has no competition in computers? Apple has been competing against commodity PC makers for 40 years. Or are you saying that Apple doesn’t have competition making MacOS computers? Apple competes with generic PC makers by making a differentiated experience. There was nothing stopping any PC maker from doing the same. It wasn’t like Apple was making massive profits in the late 90s when it bought NeXT and started developing OS X. You argue that Apple does have competition, and that's nominally true if you are very coarse and sloppy with your comparisons, but due to marketing and their walled garden, they are basically a monopoly over the upper / more artistic portions of the market: They out competed. Any of the PC manufacturers could have produced a differentiated ecosystem in the 80s or 90s instead of using Microsoft. Apple didn’t have a monopoly on marketing channels.