Technology Hits a Midlife Bump

Technology Hits a Midlife Bump. The information technology industry is maturing in ways that will affect technology companies, their customers and investors for years to come. By Steve Lohr. [New York Times: NYT HomePage]

Microsoft Moves from Cathederal to Bazaar in IIS 6

Microsoft Moves from Cathederal to Bazaar in IIS 6. Eric Raymond contrasted closed-source and open-source development in his famous essay The Cathederal and Bazaar. Developing good closed-source software requires very good programmers who build Cathederals. Open-source by its nature is a free-for-all Bazaar; the software design has to be layered so that it is accessible… Continue reading Microsoft Moves from Cathederal to Bazaar in IIS 6

Telecom bill passes, could lead to record rate increases

Telecom bill passes, could lead to record rate increases. TALLAHASSEE – Legislation that could lead to record rate increases for local telephone service was passed Thursday by the Florida House and now heads to Gov. Jeb Bush. The governor, who vetoed similar legislation a year ago just six months before his re-election, has already indicated… Continue reading Telecom bill passes, could lead to record rate increases

At eleventh hour, lawmakers save Medically Needy program

At eleventh hour, lawmakers save Medically Needy program.  TALLAHASSEE – With less than an hour to spare, the Legislature late Wednesday passed a bill to protect thousands of seriously ill people from pending cuts to the state's Medically Needy program. Under changes that had been scheduled to take effect Thursday, the 27,000 people in Medically Needy would… Continue reading At eleventh hour, lawmakers save Medically Needy program

Opportunistic Encryption of IP ttraffic: FreeS/WAN 2.0

Slashdot | Opportunistic Encryption of IP ttraffic: FreeS/WAN 2.0. Russ Nelson writes “Since 1996, John Gilmore has dreamed of an Internet where all traffic between cooperating sites is encrypted. He has supported the FreeS/WAN project which uses IPSEC to encrypt IP traffic on an opportunistic encrypting basis. The team has released Linux FreeS/WAN 2.00, their… Continue reading Opportunistic Encryption of IP ttraffic: FreeS/WAN 2.0

The real Ben and Jerry's story

Two big trends we've noted in the new oligopolies:

  1. they buy up successful new startups with innovative ideas
  2. they offer a “pseudo-choice,” that is, a way to buy their product while
    thinking your are protesting against multinationals or being more
    sophisticated than other shoppers.

Ben and Jerry's ice cream is a case in point. The socially-conscious,
enlightened-management Vermont-based company started having growth-related
problems in the late nineties. The company had been too successful and
the “hippie” founders had tired of running an increasingly complex
company.

Four multinational corporate suitors appeared: ´They were:

The real Ben and Jerry's story Two big trends we've noted in the new oligopolies: they buy up successful new startups with innovative ideas they offer a “pseudo-choice,” that is, a way to buy their product whilethinking your are protesting against multinationals or being moresophisticated than other shoppers. Ben and Jerry's ice cream is a… Continue reading

The real Ben and Jerry's story

Two big trends we've noted in the new oligopolies:

  1. they buy up successful new startups with innovative ideas
  2. they offer a “pseudo-choice,” that is, a way to buy their product while
    thinking your are protesting against multinationals or being more
    sophisticated than other shoppers.

Ben and Jerry's ice cream is a case in point. The socially-conscious,
enlightened-management Vermont-based company started having growth-related
problems in the late nineties. The company had been too successful and
the “hippie” founders had tired of running an increasingly complex
company.

Four multinational corporate suitors appeared: ´They were:

Fox acquires DirecTV

Under the guise of “increas[ing] competition in the cable markets and promote better services to U.S. customers,” News Corp. (Fox) has just bought

Fox acquires DirecTV Under the guise of “increas[ing] competition in the cable markets and promote better services to U.S. customers,” News Corp. (Fox) has just bought controlling interest in Hughes Electronics, owner of DirecTV. The $6.6 billion dollar deal takes U.S. satellite TV leader DirecTV out of the hands of a non-media parent (General Motors,… Continue reading

Fox acquires DirecTV

Under the guise of “increas[ing] competition in the cable markets and promote better services to U.S. customers,” News Corp. (Fox) has just bought

Oligopolies and Oligopsonies

An oligopoly occurs when there are only a few sellers in the market. An oligopsony (it’s a technical term from economics) happens when are only a few buyers in the market. As oligopolies grow, so do oligopsonies.

We’ve already mentioned a major oligopsony, the limited number of national book chains. Basically, the success or failure of any book depends on how it does at Borders, Barnes & Nobles, and Amazon. Other bookstores hardly matter. Needless to say, this puts those companies (that “buy books”) in a very strong bargaining position in relation to book publishers. Those three can dictate terms and determine rates.

The potato market works similarly. The biggest buyer of potatoes in the world (through middlemen) is McDonalds, followed by Burger King and Wendy’s. There are other buyers of course, but these three determine the overall demand, the type of potato wanted, the price they’ll be willing to pay, and the time of delivery. The rest of the market, is by comparison, small potatoes.

Similarly all food manufacturers are increasingly being bossed around by an oligopsony of supermarkets. Whatever Wal-Mart, Kroger, Safeway and a few others demand, you’d better supply, whether it is fees, onsite help, co-op advertising. This set of expectations shows up the weakness of small producers, who don’t have the resources to meet these requirements, or to go toe-to-toe with the biggest chains.

The best way to counter an oligopsony is with an oligopoly. Proctor and Gamble or Unilever can, to some extent, stand up against Wal-Mart or Walgreen’s. Smaller companies haven’t a chance. And by the same token, oligopsonies are formed to fight the power of oligopolies. Safeway can interact as a peer with Nestle or Kraft, while the local grocery market cannot.

Most oligopsonies are in turn oligopolies. The big chains are oligopsonies with regard to the manufacturers, but oligopolies to the customers. The cable operators are becoming an oligopsony to the oligopoly of TV channel owners’ to their subscribers, they’re local monopolies. National radio chains like ClearChannel and Viacom operate the same way.

Of course, not all industries are in the hands of two or three major players. But in almost every imaginable industry, there are fewer players than there were ten years ago. Industries that had 10 major players now have six, those that had six now have three leading firms. 
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Oligopoly Watch

Oligopolies and Oligopsonies An oligopoly occurs when there are only a few sellers in the market. An oligopsony (it’s a technical term from economics) happens when are only a few buyers in the market. As oligopolies grow, so do oligopsonies. We’ve already mentioned a major oligopsony, the limited number of national book chains. Basically, the… Continue reading

Oligopolies and Oligopsonies

An oligopoly occurs when there are only a few sellers in the market. An oligopsony (it’s a technical term from economics) happens when are only a few buyers in the market. As oligopolies grow, so do oligopsonies.

We’ve already mentioned a major oligopsony, the limited number of national book chains. Basically, the success or failure of any book depends on how it does at Borders, Barnes & Nobles, and Amazon. Other bookstores hardly matter. Needless to say, this puts those companies (that “buy books”) in a very strong bargaining position in relation to book publishers. Those three can dictate terms and determine rates.

The potato market works similarly. The biggest buyer of potatoes in the world (through middlemen) is McDonalds, followed by Burger King and Wendy’s. There are other buyers of course, but these three determine the overall demand, the type of potato wanted, the price they’ll be willing to pay, and the time of delivery. The rest of the market, is by comparison, small potatoes.

Similarly all food manufacturers are increasingly being bossed around by an oligopsony of supermarkets. Whatever Wal-Mart, Kroger, Safeway and a few others demand, you’d better supply, whether it is fees, onsite help, co-op advertising. This set of expectations shows up the weakness of small producers, who don’t have the resources to meet these requirements, or to go toe-to-toe with the biggest chains.

The best way to counter an oligopsony is with an oligopoly. Proctor and Gamble or Unilever can, to some extent, stand up against Wal-Mart or Walgreen’s. Smaller companies haven’t a chance. And by the same token, oligopsonies are formed to fight the power of oligopolies. Safeway can interact as a peer with Nestle or Kraft, while the local grocery market cannot.

Most oligopsonies are in turn oligopolies. The big chains are oligopsonies with regard to the manufacturers, but oligopolies to the customers. The cable operators are becoming an oligopsony to the oligopoly of TV channel owners’ to their subscribers, they’re local monopolies. National radio chains like ClearChannel and Viacom operate the same way.

Of course, not all industries are in the hands of two or three major players. But in almost every imaginable industry, there are fewer players than there were ten years ago. Industries that had 10 major players now have six, those that had six now have three leading firms.  [Oligopoly Watch

Barnes & Noble stocking its own books

Barnes and Noble

Barnes & Noble stocking its own books Barnes and Noble, which along with Border's dominates the retail book industry, announced recently that it was going to issue a new line of classic books, which will compete with Penguin's Classics (Pearson PLC) and Modern Library (Bertelsmann). This expands an already existing collection of books published and sold… Continue reading

Barnes & Noble stocking its own books

Barnes and Noble