3 ms·
It's an interesting point, and ultimately kind of boils down to "Is a more profitable company good for consumers?" To which the answer seems inarguably "Someti
by ethbr0 5y ago
It's an interesting point, and ultimately kind of boils down to "Is a more profitable company good for consumers?"
To which the answer seems inarguably "Sometimes." Scale that reduces production costs (and therefore prices), yes. Or prices could be maintained and the increased profits given to shareholders, in which case no.
I think the broader question is "What systemic features exist that make giant companies more efficient than a network of smaller, independent companies?"
And to that, I'd argue that in the 21st century, not many. The market and communication B2B inefficiencies that drove conglomeration in the 20th century have most been reduced to zero.
The only reason to have a hyperscale company these days is to deploy capital at scale in loss-making enterprises in hopes of capturing market share... and I'm not sure that's something that's been healthy in aggregate?
- rlpb 5y ago> And to that, I'd argue that in the 21st century, not many. The market and communication B2B inefficiencies that drove conglomeration in the 20th century have most been reduced to zero. There's still the efficiencies of mass production for physical goods. For digital services that include any element of social network, there's the network effect. I think these are still a significant factor in most markets today. For match-making services in particular, brand recognition is important; otherwise users have difficulty in _finding_ quality from a directory of smaller, independent companies. And arranging effective federation, while possible, is expensive and development of such systems is slow.
- ethbr0 5y agoTrue. But I imagine what would evolve would be a few B2C "face" brands, backed by a web of unmentioned B2B companies that customers never directly interact with. Which is essentially the dynamic now, except the B2C last mile companies can parlay their relationship and just buy everything high value upstream of them. Which... I'm not sure is great for competition. Anything that moved the market away from one in which all customers are "an Apple customer" or "a Google customer" or "a Facebook customer", with those companies unconstrained in their ability to leverage that, seems better.
- BurningFrog 5y agoA major reason to group companies together in a "hyperscale" company is to influence government regulation, which is where you can access real money and power.
- deleted 5y ago[deleted]