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"All too often the middleman is milking both sides." By definition a middleman is milking both sides. Were a middleman not there, it would definitionally be be

"All too often the middleman is milking both sides." By definition a middleman is milking both sides. Were a middleman not there, it would definitionally be better for both parties. The only case where this is not true is the one where the middleman makes no money

kbenson 5y ago
No, that assumes perfect market information. Middlemen can provide benefit by allowing people to offload research and reputation tracking to a third party that they trust, allowing them to invest time and effort in that one entity instead of a bunch of smaller ones. For example, do you buy off Amazon or NewEgg, Best Buy, etc or do you just use Craigslist, Ebay, the local paper, or even the local flea/market swap meet for electronics? You can probably find stuff for half as much or even less at some of those locations, but it might cost you a lot in research time or lost money in the end...
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_carbyau_ 5y ago
My apologies, my phrase "milking" was meant to imply "overly burdensome resource taking" when compared with their value add. IE cost too much To rephrase, all too often middlemen are there because of legislative/financial props from government or other incumbent advantages and - as you say - both sides would be better without them. In this case - as in many middlemen cases - Google provides value - their search services. This "value" is the hook for their place in the transaction. If Google provided a useless list of random results for every search term then it is obvious they would lose their place. But where is the crossover point? Where Google doesn't provide enough perceived value compared to their perceived cost such that the market abandons them? Peoples growing dislike of ads and - from this article - advertisers changing perception of ad value will change the cost vs value equation. But I still think Google is safe for now.

kbenson 5y ago

No, that assumes perfect market information. Middlemen can provide benefit by allowing people to offload research and reputation tracking to a third party that they trust, allowing them to invest time and effort in that one entity instead of a bunch of smaller ones. For example, do you buy off Amazon or NewEgg, Best Buy, etc or do you just use Craigslist, Ebay, the local paper, or even the local flea/market swap meet for electronics? You can probably find stuff for half as much or even less at some of those locations, but it might cost you a lot in research time or lost money in the end...

deleted 5y ago
[deleted]

_carbyau_ 5y ago

My apologies, my phrase "milking" was meant to imply "overly burdensome resource taking" when compared with their value add. IE cost too much To rephrase, all too often middlemen are there because of legislative/financial props from government or other incumbent advantages and - as you say - both sides would be better without them. In this case - as in many middlemen cases - Google provides value - their search services. This "value" is the hook for their place in the transaction. If Google provided a useless list of random results for every search term then it is obvious they would lose their place. But where is the crossover point? Where Google doesn't provide enough perceived value compared to their perceived cost such that the market abandons them? Peoples growing dislike of ads and - from this article - advertisers changing perception of ad value will change the cost vs value equation. But I still think Google is safe for now.