Who's Afraid of Apple, Google, Facebook?

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Facebook seemed like an also-ran just a few years ago—similar to Friendster and Myspace, but with fewer features. Now it's valued at more than $33 billion and feared by everyone. Could it be the next Microsoft, and therefore deserving of our criticism for being a quasi-monopoly? Perhaps, but that case has yet to be made. Look at Twitter: In just three years, it has gone from being a quirky toy used primarily by geeks to a digital-age communications network used by hundreds of millions of people as a real-time news medium; it has a theoretical market value of more than $3 billion.

Wu argues that while they may not be strictly defined as monopolies, these companies are large enough and have integrated themselves into our lives in such a way that they might as well be monopolies. The risk with this argument, of course, is that governments tend to take a dim view of monopolies, whether metaphorical or otherwise, and talking about Google or Facebook in those terms could make it even more appealing for regulators and politicians to get involved in legislating technology markets and services—rarely a good thing.

"Network Effect" Builds and Destroys

In his Journal piece, Wu says he believes the Internet is more prone to monopolistic behavior because "a single firm can dominate the market if the product becomes more valuable to each user as the number of users rises. Such networks have a natural tendency to grow, and that growth leads to dominance." What Wu is describing—the so-called "network effect"—is a double-edged sword. Just as it built the former empires of Friendster and Myspace and AOL, it just as efficiently dismantled them when a better (or at least more popular) network came along.

Should we beware that Apple is trying to control too much? Undoubtedly. Need we also be vigilant when networks such as Facebook try to control too much of our information, as Berners-Lee advocates? Sure. Wu, however, seems to want to draw a comparison between AT&T's longtime control over telecommunications and the power of companies such as Google and Facebook. The analogy just doesn't work. There are still too many variables and the ubiquity of the Web arguably makes monopolies more difficult to maintain, not less.

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