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NYT article: Search is a natural worldwide duopoly -- and Google out-discriminates Yahoo 11-4

"The search engine business will shake down to a natural worldwide duopoly" was how the New York Times paraphrased Randy Befumo, the Co-Director of Research for Legg Mason, which is one of the largest investors of both Yahoo and Google, in the article Sunday "Sunny and Gloomy Signs at a Web Crossroads." Befumo also said: "We think that Google and someone else -- we think the odds are Yahoo -- will do this for a majority of the Internet, ... Very few other people will be able to get the scale of traffic to make it work."

  • Google frequently justifies asking for regulation of competitive broadband by saying broadband is a "duopoly."
  • Does this suggest that Google believes companies that have a large "duopoly" market share should be regulated? Or does that only apply to others not "Do no Evil" Google? 

The other very interesting information in this article is that it says Google makes 11 cents for every search while Yahoo only makes 4 cents per search. Yahoo's "Project Panama" hopes to increase Yahoo's search model to get 5 cents per search by 2008.

  • Since the search business model is about ranking information for a fee, also called discrimination, it would follow that Google out-discriminates Yahoo by a 11-4 margin.
  • In other words, Google's secret discrimination algorithm discriminates three times more profitably than Yahoo's secret algorithm discriminates.

Search "rankings" sounds so much more benign than search "discrimination results" doesn't it?