Facebook is a form of social media that has over 2.23 billion monthly active users and has been rather controversial in light of recent events, including the unwarranted sharing of consumer information. Facebook, Messenger, and Whats App are currently, and have been, the top three IOS downloaded social networking apps. Of the three apps, one is Facebook, the other has direct correlation with the Facebook app, and Whats App is owned by Facebook.
Facebook dominates the market and is the largest social networking app, out there. YouTube is the second most popular app downloaded, but does not do the same thing, when compared to apps like Facebook and Instagram, which therefore can eliminate YouTube from being direct competition. Whats App and messenger are the most downloaded apps after YouTube, once again displaying the potential power that Facebook could have. There are other apps on the market such as Snapchat, but apps like these are independent apps that do not own multiple companies, unlike like Facebook does. Facebook and Google, a company that has been studied over the course of the past week, have similar market strategies in some ways. For example, Google has bought up many companies and made them a part of Google. Facebook, has also done this with apps such as Instagram which was bought for around 1 billion dollars. Additionally, Facebook has tried to buy the competition in which is Snapchat, but they are unwilling to sell. Overall, while there are apps like Snapchat that are in the same market, they do not hold the power that Facebook does, and therefore, there are no powerhouse companies to challenge Facebook. This is a characteristic of monopolistic competition.
In the world of internet advertising, Facebook and Google both partake in a large amount of online ads. Google generates a little over twice the ad revenue that Facebook does however, and in this scenario they are a competitor. It cannot be argued that Facebook has a monopoly on internet ads, but they do play a large role in them, as Facebook and Google are the biggest companies in this form of advertising.
In summary, Facebook exhibits qualities that a monopolistic companies holds, such as being the biggest player in the market, along with lacking substantial competition. However, as the do not have complete control over the market they can, by definition, not have a perfect monopoly over social networking. Additionally, when it comes to internet advertising, they are not a monopoly, but they could be considered to have a duopoly with Google.
Works Cited:
https://www.fool.com/investing/2018/04/17/is-facebook-a-monopoly.aspx
https://www.investopedia.com/terms/d/duopoly.asp
https://www.marketwatch.com/story/the-uncomfortable-question-zuckerberg-kept-facing-is-facebook-a-monopoly-2018-04-11
https://www.forbes.com/sites/timworstall/2017/05/10/google-and-facebook-are-dominant-but-not-monopolies/
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Great post! You brought up a lot of great points that demonstrate that Facebook is monopolistic in many aspects. However, I think it is very important to clarify the difference between monopoly and monopolistic competition, as the two terms were used somewhat interchangeably in this post. Monopolistic competition occurs in a market where many competitors have different products that do not directly compete with one another for the same product. For example, in the fast food industry, each company creates a different product, even in the same category. This differs from monopoly as you discussed in your article. Regardless, this was super informative and definitely makes me think about the power Facebook has over my daily life.
ReplyDeleteI really like the ideas that you bring up about Facebook and its monopolistic characteristics. The idea of duopoly, sort of like oligopoly, is very interesting because I think we sometimes overlook companies who share domination, whereas we tend to target singular monopoly companies. Specifically with Facebook, I think we see a company close to a monopoly, yet very few people and consumers are stepping up to prevent them from running away with power.
ReplyDeleteI liked how you asked the question of how powerful Facebook is and if it could be considered as a monopoly. It is interesting to see how Facebook shares many qualities of a monopoly, but still is in a market of monopolistic competition due to companies like Google and Snapchat. I think we sometimes forget about how much power these big companies have in our daily lives and it was interesting to learn about how much Facebook owns.
ReplyDeleteFacebook does have many characteristics of a monopoly, and I think your post does a great job explaining it. With Facebook as big as it is, it has the ability to buy huge companies such as Instagram, as you explained. This is similar to what we have learned about Disney in class. Both companies can buy their competitors, limiting competition. Although any company can enter the social media market, there is a good chance if successful it will be bought by Facebook, just like what happened to Instagram. Overall, I think your post does a good job explaining the key aspects of a monopoly Facebook holds.
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