gas prices

[Kidlicious]

Originally posted by Dauphin


Only if you think people pay more for goods and services because companies have raised prices to cover advertising costs. If advertising increases sales volume then gross profits may increase by more than those advertising costs and there would be no need to raise prices, you may in fact lower them.

I disagree that they usually lower prices with lower average costs. More often this helps them become more competitive and therefore they don't have to lower prices. That being said some companies do lower prices if their goal is to become a low cost provider.

[Dis]

public transportation in my city can take 1.5 hours or more one way. so you are losing 3 hours of your day to it. I'm not willing to sacrifice that much time. The problem is you can't get anywhere without making at least one transfer.

[Drogue]

Originally posted by Kidicious
Consumers pay for it indirectly.

That didn't answer my question, which was how do you pay for Google? Moreover, you missed the point, as the original question was "Is the price of using a search engine too high because Google are making huge profits?". Clearly the price isn't too high, even if consumers pay for it in non-price ways. Although I'm interested in your answer the second question, in how do consumers pay too much for it?

[Kidlicious]

Originally posted by Drogue

That didn't answer my question, which was how do you pay for Google? Moreover, you missed the point, as the original question was "Is the price of using a search engine too high because Google are making huge profits?". Clearly the price isn't too high, even if consumers pay for it in non-price ways. Although I'm interested in your answer the second question, in how do consumers pay too much for it?

google makes too much profit. therefore consumers pay too much. this makes sense if you accept that consumers pay google indirectly.

It's not just their profit either. I'm also talking about all kinds of expenses that they have that wouldn't be needed or effective in a competitive environment.

[Drogue]

Originally posted by Kidicious
google makes too much profit. therefore consumers pay too much. this makes sense if you accept that consumers pay google indirectly.

That still doesn't answer the question - how do consumers pay Google? You're asserting that having too much profit automatically means consumers are paying too much, without telling us which mechanism causes this to be so. I don't think consumers pay at all, as companies pay Google when they feel they will gain more than the cost of advertising, the same as any service.

Originally posted by Kidicious
It's not just their profit either. I'm also talking about all kinds of expenses that they have that wouldn't be needed or effective in a competitive environment.

And how would a competitive environment be possible in search engines? Clearly there is a *huge* network externality, since the more people that use one, the better that one becomes (more sites register there) and so the more people use it. It's a natural monopoly, hence a competitive environment yields few companies.

[Dauphin]

Originally posted by Kidicious


google makes too much profit. therefore consumers pay too much.

So you reckon if google wasted money on ridiculously inefficient business practices such that they made no profit they would suddenly be charging a fair price despite not, in fact, changing the price?

[Kidlicious]

Originally posted by Drogue
That still doesn't answer the question - how do consumers pay Google? You're asserting that having too much profit automatically means consumers are paying too much, without telling us which mechanism causes this to be so. I don't think consumers pay at all, as companies pay Google when they feel they will gain more than the cost of advertising, the same as any service.

They pass those costs on to their customers just as an oil company would pass on the cost of a gas tax. I don't know what you are asking for.

And how would a competitive environment be possible in search engines? Clearly there is a *huge* network externality, since the more people that use one, the better that one becomes (more sites register there) and so the more people use it. It's a natural monopoly, hence a competitive environment yields few companies.

I'm not saying that it could be competitve. I'm saying that if it were competitive they would have less expenses. It's those expenses that should be considered.

[Kidlicious]

Originally posted by Dauphin


So you reckon if google wasted money on ridiculously inefficient business practices such that they made no profit they would suddenly be charging a fair price despite not, in fact, changing the price?

What? No. They have those expenses to make more profit.

[Dauphin]

Right, so when a company has massive overheads through poorly planned business inefficiencies they are definitely going to make huge profits. Yep, no bloated inefficient company charging over the odds for services ever lost money.

[Kidlicious]

Originally posted by Dauphin
Right, so when a company has massive overheads through poorly planned business inefficiencies they are definitely going to make huge profits. Yep, no bloated inefficient company charging over the odds for services ever lost money.

Such a company is not very effective. I'm assuming that most companies are more effective than that. I realize that there are examples where companies have not been effective in the past.

[Dauphin]

So why is it 'high' prices that are causing them 'too much' profits, and NOT low cost of sales resulting from high efficiency savings?

[Zkribbler]

Originally posted by Dauphin
Right, so when a company has massive overheads through poorly planned business inefficiencies they are definitely going to make huge profits.

Ahh. You're speaking of Microsoft.

[Kidlicious]

Originally posted by Dauphin
So why is it 'high' prices that are causing them 'too much' profits, and NOT low cost of sales resulting from high efficiency savings?

Because it's not a competitive environment, and they don't set their prices according to their costs as if it were a competitive environment.

[Kidlicious]

Dauphin,

I think you are assuming that an effective company is one which has low prices. I think that's not a good assumption.

[Zkribbler]

Originally posted by Dauphin
So why is it 'high' prices that are causing them 'too much' profits, and NOT low cost of sales resulting from high efficiency savings?

Because prices have DOUBLED since Bush became President and had the oil companies gather behind closed doors in the White House to draft America's energy policy.